We are in the midst of the worst health crisis of our lifetimes. We have seen markets melting into panic, fear and confusion taking over our lives and work. One by one, countries have entered lockdown in an attempt to manage the spread of Covid-19. Experts tell us that flu pandemics recur reliably but unpredictably every decade or so. Even so, the markets are in free flow and our work is being disrupted at a head-spinning rate.
Things will eventually come to normal — they always do. But it will be a new normal.
There are many examples which demonstrate that innovation gains speed during hard times. In my lifetime, I have experienced a few recessions, market crashes and I have seen changes in behaviour and innovation. The fintech industry gained momentum after the 2008 financial crisis. It pushed customers away from branch banking to online banking. Software procurement has also changed from licenses to software-as-a-services. This has promoted cloud computing services, and the growth of storage and pay as you go software. With it, cashless payments and fintech solutions have proliferated. Companies like Amazon and Google have built an enduring presence, including in our industry, and even during the lowest point of the markets they still delivered substantial revenue gains. It is likely that we will see more companies investing in technological innovation, particularly in artificial intelligence (AI).
A large part of the investments will be addressing current problems derived from dependency on legacy systems, because most decision makers haven’t been prepared for taking drastic measures to change the IT infrastructure.
As we are fighting coronavirus, we are in war-like conditions. It’s a war which we will win. Sadly, there will be casualties. We need to use every tool we have including technology to win this war.
When this crisis will end, our social and work landscape will be forever changed. Many will use this crisis to advocate strict monitoring of office space and staff, perhaps compulsory activity trackers will become part of our employment contract, and our body temperature will be measured when we enter work just to rule us out as potential sources of infection. Everyone will be safer, they’ll say.
However, we will need to take a closer look at the type of data collected on us, and decide what to allow and what to reject. Is a compulsory temperature check essential every day we enter the office, when there's no pandemic? Will cashless payments using gesture and biometrics like iris scan, face, or vein architecture be essential in normal times?
In a world in which we will be left traumatised by the current crisis, we need more than ever to invest in trusted AI — robust, unbiased, explainable and fair AI which builds trust rather than destroys trust. Trust is the one thing which we ought to preserve — it is the most important value which defines our industry.
Technological innovation will accelerate.The infrastructure we rely to work from home during the lockdown, is delivered by AI-first companies, vertically integrated companies - Google, Microsoft, Apple. In the same way, in our industry the winners will be those who invest in building vertically integrated AI-first companies - not only will they build a profitable business but they will also dominate this industry.
This is a long term strategy in which corporate boards play a crucial role. Boards themselves need to change their composition and invite in AI experts, with a deep sector expertise. An MIT study found that a digitally savvy board is the "new financial performance differentiator" with 38% higher revenue growth and 34% higher market capitalisation. AI experts are good business and essential, as companies need to transition to AI-first business. Not adding AI experts on boards will likely equate to eroding shareholder value and undermine the company's competitive position.
Clara Durodié is a technology strategist specialising in applied artificial intelligence (AI) in financial services, with a focus on ethical AI for business growth. She is the executive chair of Cognitive Finance Group, board director of Altilia and the author of 'Decoding AI in Financial Services"
Copyright © Clara Durodié 2020
Article written on the 16th of March 2020 and published on the 2nd of April in The Banker, a Financial Times newspaper.
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