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- A report by IHS Markit predicts the global business value of artificial intelligence in finance will be $300 billion by 2030. In 2018, the cost savings and efficiencies of introducing AI on Wall Street was estimated to be $41.1 billion.
- More AI at banks will also lead to job losses or reassignments, with 1.3 million US workers expected to be impacted in 2030.
- Asia Pacific is expected to surpass North America in use of AI in banking by 2024.
Artificial intelligence in banking is sure to be big business in the coming years. It will also have a big impact on employees, according to a recent report.
Data and technology company IHS Markit published a report Wednesday that estimated the cost savings and efficiencies of introducing AI on Wall Street will be valued at $300 billion globally by 2030.
That’s a large pop from where the industry currently stands. In 2018, the benefits of using the cutting-edge technology was estimated to be only $41.1 billion.
However, the change won’t be frictionless. The report estimates job losses or reassignments will impact 1.3 million bank workers in the US alone by 2030. Specific roles that stand to be disrupted, according to Don Tait, principal analyst at IHS Markit, include customer service reps, financial managers, and compliance and loan officers.
Market experts have long debated how employees will be affected by increasingly introducing AI at banks. Some have suggested the new technology might not lead to massive job losses, but instead force firms to reconsider where and how to deploy their human capital.
“The innovative capabilities AI will bring to financial services will be transformative,” said Tait in a statement. “AI is poised to challenge and blur our concepts of computing and the ‘natural’ human. This sea change will require both businesses and governments to develop expansive foresight and critical understanding of the full effects of digitization and emerging technologies.”
The US also stands to lose some ground as a leader in AI development. In 2018, North America saw $14.7 billion in value from AI usage, the most of any region. However, Asia Pacific is set to eclipse it as the leader globally by 2024, according to the report.
By 2030, Asia Pacific’s use of AI will reach $98.6 billion, ahead of North America at $79 billion.
"Countries like China, Japan, South Korea, Hong Kong and Singapore are likely to drive the demand for AI within the banking sector over the next ten years,” Tait said.
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