Experts from Google, IBM, Microsoft, 4th IR and more came together at Imperial College Business School to discuss the ways in which artificial intelligence is already changing the risk management industry
“We believe AI’s purpose is to augment human intelligence,” so said Grace Brasington, Vice President of Global Banking and Financial Markets at IBM Risk & Compliance Cognitive Solution. She was speaking at ‘Artificial Intelligence in Risk Management’, an event held by Imperial College Business School Executive Education, the Institute of Risk Management Special Interest Group (Banking & Financial Services) and the Trestle Group, on 3 October.
“We are committed,” she continued, “to helping students, workers and citizens acquire the skills to engage safely, securely and effectively with cognitive systems, and to do the new kinds of work that will emerge in a cognitive economy.”
The “cognitive economy” is one that will be born of the unparalleled insights and transformations brought to business by the application of artificial intelligence to the huge data sets the private and public sectors are now generating.
In his keynote talk, Professor Tarun Ramadorai of Imperial College Business School pointed to the words of Eric Schmidt, former CEO of Google, in 2010: “There was five exabytes of information created between the dawn of civilisation [and] 2003, but that much information is now created every two days, and the pace is increasing.” And that was seven years ago.
What is required in order to harness this vast wealth of information, according to speaker Frank Luijckx of 4th IR, are “practical, innovative solutions” to risk management and AI: a process that can be summarised as “observe, understand, decide, execute”.
Matt McNeill from Google Cloud quoted his company’s current CEO, Sundar Pichai: “Machine learning is a core, transformative way by which we’re rethinking how we’re doing everything.” The company’s DeepMind subsidiary is already “building systems that know how to walk, with no reference to how humans actually walk”. Beyond Google, he highlighted the work of Descartes Labs (which “forecasted US corn production within 1.9 per cent of the final USDA report, which wasn’t available until five months later”) and AXA (whose “underwriters achieved 80 per cent prediction rate of drivers at risk of having accidents creating large loss cases”).
While this work will inevitably be disruptive to existing industries – it has already been termed the Fourth Industrial Revolution – it will also create “new collar jobs” (to quote Brasington). In his presentation, Martin Moeller, Digital Transformation Principal for Banking & Finance at Microsoft, described this new combination of man and machine as “augmented intelligence”, and pointed to the applications of machine learning in finance and risk: stopping fraud, enabling biometric security, and predicting future events.
These are just a few examples of how the data revolution is not some coming event – it is already changing the risk management industry. Frank Luijckx perhaps best summed up the feeling of the event when he said: “We believe that a symbiotic application of machine intelligence and human intelligence will lead to a safer, more sustainable, and more productive world.”