NZ financial services must urgently embrace AI, report argues

AI in financial and insurance sectors a possible ‘quick win’

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The AI Forum of New Zealand has released a report on artificial intelligence for the financial and insurance sectors that calls for NZ to urgently increase its focus on AI, particularly investment, skills and talent, research, trusted data, ethics and regulation.

AI Forum executive director Emma Naji said the rapid development of AI technologies presented major opportunities and challenges for Kiwis. AI in the financial and insurance sectors represented opportunities for “a viable quick win” for New Zealand, Naji said.

“There are technology innovations, regulatory demands, and socio-political and economic disruptions emerging,” she said. “Open banking is a real opportunity to explore and transform traditional banking.”

According to the AI Forum, New Zealand’s financial services and insurance sectors are undergoing a period of significant change.

The report identifies several opportunities for AI to remake the face of financial services. It says many companies are already experimenting with possibilities across banking operations.

These include:

  • automated customer service agents that aid in understanding customers' needs, reducing time and resources spent in resolution.
  • robo-advisors that provide automated, often AI-driven, financial planning services and individualised investment plans for customers with little to no human interaction.
  • AI fraud detection that uses deep learning techniques to more quickly and accurately detect fraud.
  • robotic process automation for automating ledger reconciliations and other processes.

The report recommends:

  • Government accelerate its industry transformation plans and consider a specific government-supported focus on the future of the financial services sector, including the role that AI has to play.
  • New Zealand fintech companies focus on developing and exporting AI-driven financial services products to large markets like the UK where there is larger sales potential.
  • Large banks and insurers seek to partner with the local fintech and insurtech vendor community to foster AI innovation.
  • Financial sector organisations seize the opportunity to work together across the ecosystem (including regulators) on collective solutions to shared problems – for example anti-money laundering controls and fraud prevention.
  • Financial organisations focus on talent development, including technical and AI savvy management.

The report is the latest in a series from the AI Forum looking at the impact of AI in different industry sectors. “Towards our Intelligent Future” released in September provided a policy framework for AI and highlighted the potential for AI to address well-being, sustainability and economic issues.

This was followed by a report into the use of AI by the health sector that said AI could contribute more than $700 million of value and savings annually by 2026, and $1.6 billion to $3.6 billion by 2035. Early in October the Forum released the results of an interview survey with employers of AI talent in NZ.

Copyright © 2019 IDG Communications, Inc.

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