Last Updated on February 3, 2024 by SPN Editor
Andrew Bailey, the Bank of England’s Governor, has dismissed concerns that Artificial Intelligence (AI) will result in mass job losses. As an economic historian turned central banker, Bailey believes that economies and jobs are adaptable, and that the combination of humans and machines often yields superior results than machines alone.
His remarks on AI not leading to mass job losses coincide with the latest economic analysis indicating that UK businesses investing in AI are likely to experience increased efficiency and output. The deployment of AI is predicted to enhance productivity across a range of sectors.
However, Baroness Stowell from the House of Lords has warned that the UK could miss the “AI goldrush” if it doesn’t act swiftly.
A report by the Lords’ Communications and Digital Committee focused on large language models and tools such as ChatGPT. The report advocated for revised copyright laws and called on the government to clarify AI regulation, cautioning that excessive regulation could impede AI development in the country.
Both Bailey and the Lords committee appear to concur that the emphasis should be on capitalising on the benefits of AI while managing potential risks.
The financial services sector is also poised to benefit from responsible AI adoption. Dr Henry Balani, Head of Industry & Regulatory Affairs at Encompass Corporation, stated that generative AI offers potentially exciting advantages for financial institutions. For instance, in the fight against financial crime, AI can enhance detection speed and accuracy by analysing large data sets.
However, Balani stressed that certain key roles, such as Know Your Customer (KYC) analysts, cannot be replaced at present. Instead, AI will expedite existing processes and supplement the work of analysts, enabling them to identify financial crime risks more rapidly and thoroughly.
Balani added that the full potential of generative AI can only be harnessed if banks and financial institutions have already implemented robust digital and automated processes to optimise data quality and provide more in-depth customer insights. By prioritising this now, banks will be well-positioned to leverage this emerging technology as it continues to develop and mature.
Recent research from EXL revealed that approximately 89 percent of UK insurance and banking firms have implemented AI solutions in the past year. However, data optimisation issues often limit their benefits.
The fear of AI leading to mass job losses is largely unfounded. As economies and jobs adapt over time, the integration of AI is expected to augment human capabilities rather than replace them. The focus should be on leveraging AI’s potential to enhance efficiency and productivity, while managing its risks responsibly. This approach ensures that AI becomes a tool for progress, rather than a perception of mass job losses, a threat to employment.