27 July 2018
Postcard from Tomorrow: What are the Limits of Possibility?
Market FinTech’s RegTech Supplier Performance 2018 report features an article by Cliff Moyce, Global Head of the Finance Practice at DataArt. Moyce argues that AI technologies available right now can revolutionise our ability to manage risk, security, and compliance and thus significantly improve the stability and security of financial services and capital markets.
“By pointing RegTech solutions at multiple data sources (quantitative and qualitative) and letting software understand what it all means through ML, the saving in effort, time and money will be enormous, along with us gaining greater risk management insights and accuracy.”
“It doesn’t matter how many data sources or how complex the outputs required, AI will manage it. The more complex the situation, or the greater the scale and cost of data sources (as in bank legacy systems) the more value to be gained from using AI. Risk management in all its forms - including the most complex modelling of inter-bank systemic risk - can be handled by AI better than any person or group of people using traditional IT tools.”
“We always have new technologies and ML is just the latest in a long line. What we fail to do is change our particular world (eg FI’s) for the better by using them.”
“Rather than trying to solve data availability, quality and integration problems using the current approach of bricolage and projects, we should instead envisage a business world where data quality and availability matter far less while we achieve better outcomes at the same time (eg better risk models in which we have more confidence; reports we are prepared to stand against etc).”
“Many areas of risk management lend themselves to an AI approach that can generate new insights and new models from qualitative and quantitative data (including meta-data), without requiring significant data normalisation, harmoniation or integration efforts across enterprises or markets.”
“Artificial intelligence, machine learning and RegTech have enormous amounts to offer us, but only if we start to be more ambitious in the scope, scale and degree of change to which we aspire. And only if we truly own the problem and the solution. Part of that may involve us bringing potential providers together and funding them to achieve the vision through an industry wide programme that includes the active participation of regulators. Let’s hope our postcard from tomorrow shows that we have been brave enough to break free from our current, hidebound approaches, and pushed through into a better business world with better risk management.”
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