The UK’s strength as a global financial centre is well established and we currently enjoy a clear competitive advantage in a range of activities from traditional banking and insurance through to currency exchange and bond trading.
However, with Brexit looming large and an increasing number of specialist and regional centres developing their own capabilities, it is vital the UK innovates and seeks to continually improve its services.
There is every reason to be optimistic. With London the leading Fintech capital, more people now work in UK Fintech than in New York Fintech or in the combined Fintech workforce of Singapore, Hong Kong and Japan.
Importantly, the Government has committed to an ambitious Sector Strategy seeking to establish a new set of industry standards to enable Fintech companies to partner more easily with banks, with extensions to build upon the recent PDS2 and Open Banking regulations and Fintech Regional Envoys to ensure nationwide benefits.
As the Strategy makes clear, artificial intelligence (AI) will also be crucial to the future competitiveness of financial services, with just some of the applications including asset management, enhanced fraud detection and automated regulatory compliance.
Applications of AI in financial services
Europe’s largest technology festival, London Tech Week kicked off on Monday with AI firmly on the agenda, including at the week’s headline show, The AI Summit. Innovate UK have partnered with The AI Summit and have been involved in the judging of several categories at their AIconics awards, including Best Application of AI in Financial Services.
The quality and diversity of this category’s 2018 finalists shows how AI has already started to push boundaries in the finance industry. This year’s winner, WorkFusion Smart Process Automation (SPA), enables organisations to scale their transformation programs by automating critical journeys such as trade finance and customer onboarding.
Purpose-built for the back-end operations, WorkFusion SPA is able to diagnose issues, predict costs, capacity and productivity of the entire digital workforce and propose actions to tune the operation. Significant cost savings can be achieved by reducing the automating much of the manual process work and increasing human productivity.
Automation often increases the amount of data being captured verifying compliance and enabling traceability. WorkFusion SPA have also addressed the ‘cold start’ challenge often facing machine learning solutions through the need for less training examples to get started.
But we are still at the start of the journey. AI is set to disrupt every corner of the industry, with Tractica predicting investment in AI within financial services will exceed $4.5 billion by 2025.
The UK is well positioned to achieve a step change in the productivity of financial services sector through AI, which is why next generation services was identified as one of the first areas suitable for the Industrial Strategy Challenge Fund.
The Challenge will make £20 million of R&D funds available to help accountancy, insurance and law businesses and researchers take advantage of digital technologies, and innovate new services.
For the UK’s finance and professional services sector, along with tech companies, designers, researchers and entrepreneurs, this fund presents a major opportunity to develop the market-leading services of the future, and to help ensure that the UK retains its position as one of the world’s great financial centres.
- The AI Summit runs 13-14 June at the ExCel Exhibition Centre and the 11 AIconics winners will be participating in a live ‘pitch off’ on 13 June
- A programme of CR&D briefing events for the Next Generation Services Industrial Strategy Challenge Fund will be held around the UK in June.
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