Instructor: David Schuff, Section 003

Is the Financial Services Industry Due for Disruption?

Financial services firms are already facing important questions about their future that disruptive technologies like AI, machine learning, and blockchain might have. A set of senior financial services industry executives participated in a survey focused on “Big Data Business Impact: Achieving Business Results Through Innovation And Disruption,” which was done by NewVantage Partners. A significant amount of executives (40%) responded that they felt their industry was at risk of major disruption coming within the next decade. Should this number be a lot higher? As of a result of this, financial services firms may seek to learn knowledge from companies in big data and digital companies that rapidly evolve. Some firms are already building out innovation centers, incubation labs, and analytical sandboxes, hoping to improve agility and speed when it comes to starting new channels and bringing novel products and services to market. What impact do you think AI and machine learning will have on the financial services industry?



One Response to Is the Financial Services Industry Due for Disruption?

  • I think much more than 40% of executives in the financial services industry should be prepared for major disruption over the next several years. Since the early 2000s, the growth in automated trading based on quantitative algorithms has magnified, displacing many jobs at typical investment banks. Furthermore, the increased flow and availability of information has reduced the need for research analysts, as many investors have access to all necessary information. I believe these are just the first steps of what could be a major change in the financial services industry. As AI advances, the execution of stock trading and investment decision making could be carried out by a robot charging significantly less than a financial advisor. We are still in the early days of AI, but if/when AI takes over the role of financial advisors, many people will lose jobs and the way people look at investing will change drastically.

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