Many revolutions have changed the world: the Renaissance and the Reformation of the fifteenth and sixteenth centuries, the Scientific Revolution of the seventeenth and eighteenth centuries, the Industrial Revolution of the nineteenth century, and the Digital Revolution of the twentieth century. We are experiencing the Artificial Intelligence (AI) Revolution in the twenty-first century. This technological advancement will change the world in ways we have never imagined.

 

How does this impact our industry?

The financial services industry is specifically undergoing a transformative phase with the integration of AI technologies. AI, in its formative years, is just starting on the path to reshape traditional business models and influence every aspect of operations. From virtual assistants and predictive algorithms to advanced robotics, the influence of AI is undeniable. AI technology provides unprecedented convenience with routine tasks that consume our valuable time. This notable impact will be restructuring job duties within banks and credit unions. Changes in role functions and employment dynamics will provide unlimited opportunities for increased efficiency and productivity. We are evolving to a new era, but these notable changes likely will not be immediate.

 

We put the ‘I’ in I, Robot

Over the next five years, we expect banks to invest heavily in incremental innovations that still need a human-in-the-loop (HITL) to ensure that the implementations meet accuracy, precision, and compliance expectations as the AI applications mature. This human guidance will facilitate and guide the development of AI. Global spending on AI is expected to rise from $166 billion in 2023 to $250 billion by 2027, according to a report by International Data Corp. (IDC), a technology market intelligence and advisory services provider. Generative AI can be used in many ways, though one guaranteed outcome will be a significant expansion of AI’s role in the financial industry sector.

 

What does this mean for employee pay?

 The implications for compensation structures and job responsibilities will involve a shift in the skills required for many jobs. Continuous learning and upskilling will become essential to remaining relevant in the evolving job market for employees at every organizational level. Workers must adapt and acquire new skills to work effectively alongside AI systems. Job roles will augment human capabilities, assisting workers in decision-making, data analysis, and problem-solving, leading to more informed and effective outcomes. 

Compensation structures may reflect the importance of acquiring and maintaining new skills, promoting a continuous learning culture. Automated processes, including back-office operations, could lead to reevaluating job roles, potentially affecting compensation structures as organizations seek to optimize their workforce. Automated decision-making processes like credit scoring, loan approvals, and risk assessments are increasingly employed.

 

Working smarter, not harder

Fraud detection algorithms are enhancing the security of financial transactions. These technologies will inevitably become more sophisticated, causing the demand for professionals skilled in cybersecurity, risk management, data science, and analytics to increase, influencing comp packages and affecting the ability to attract and retain top talent for these positions.  

AI technologies are improving customer interactions and service delivery. As AI takes over these routine functions, human roles will evolve towards more strategic and complex responsibilities. This shift will allow employees in financial institutions to focus on high-value, customer-centric tasks, such as personalized financial advice and relationship management, again leading to a potential reevaluation of job roles and compensable structures.

 

We’re all responsible

Financial institutions will be essential in actively participating and shaping the ethical use of technology as the AI world becomes increasingly more complex. They must advocate for AI transparency, fairness, and accountability. Employees will also need to stay informed about the ethical considerations surrounding AI and engage in discussions that influence policies and guidelines. By being thoughtful consumers of this important technology, we can ensure that AI is a force for good.

As AI reshapes the financial services industry, banks and credit unions must adapt to remain competitive. The transformation of compensable factors and job duties is inevitable, driven by the need for increased efficiency, improved customer experiences, and strategic decision-making. Organizations and employees alike must embrace this evolution, recognizing the opportunities for professional growth and innovation in the dynamic financial services landscape.

 

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