How to stop robots seizing control of your bank
In the Musk-Zuckerberg debate, artificial intelligence could either ruin or save the planet. In responding to the AI challenge, banks need to be aware of the risks, writes Brian Caplen.
Self-driving cars crash less often than ones driven by humans but they still crash. When they do the liability issues that arise have still to be sorted out. Equally, as banks start to use artificial intelligence (AI) for customer relations, processing and trading, efficiency will improve but there is increased scope for mishaps. Banks need to be thinking about these risks now.
In the most extreme thinking – the way Tesla and SpaceX CEO Elon Musk sees it – unregulated AI represents a “fundamental risk to the existence of civilization”. “I keep sounding the alarm bell, but until people see robots going down the street killing people, they don’t know how to react, because it seems so ethereal,” he said at a gathering of US governors.
In this scenario, presumably no one will care too much about a few dissident robots sitting around in the bank boardroom issuing bonus cheques to their favourite programmers. Surely time, anyway, for the IT folks to get the recognition they deserve!
On the other side of the argument, Facebook CEO Mark Zuckerberg thinks AI will lead to improvements in the general welfare through better diagnosis of diseases and fewer car accidents.
The debate between the two tech titans has become pretty heated, with Mr Zuckerberg describing Mr Musk’s comments as “pretty irresponsible” and Mr Musk replying that Mr Zuckerberg’s knowledge of the subject is “limited”.
Cooler heads have pointed out that AI is not the equivalent of the human brain and never will be. “These complexes of artificial intelligences will for sure be able to exceed us in many dimensions, but no one entity will do all we do better,” says Kevin Kelly, the founding executive of Wired.
For banks, AI provides the opportunity to offer customers new ways of doing banking as well as keeping down costs. But there are risks.
While it seems unlikely that robots doing trade surveillance one day will next day seize control of the bank, even that eventuality should probably be in the disaster recovery scenario planning. Pull the plug seems like the best response unless, of course, the robots are armed.
More seriously, AI offers scope for all the kinds of errors and risks that are currently thrown up by digital banking yet on a grander scale. So think bad programming, software glitches, online fraud, cyber attacks and go from there.
Brian Caplen is the editor of The Banker. Follow him on Twitter @BrianCaplen
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