Data Analytics and AI to Disrupt Finance Sector – E&Y Singapore Study

The recent Ernst and Young report titled “The Impact of Wider Integration of Data Analytics and Automation on Manpower in the Singapore Financial Services Sector” was commissioned by the Institute of Banking and Finance (IBF) and the Monetary Authority of Singapore (MAS). It focused on the impact that data analytics and automation would have on the financial industry in the country in the coming years. The report also analysed skills to understand what would be relevant and in demand with regards to job responsibilities and tasks in the future.

In addition, the report looked at 121 job roles that were level agnostic and not linked to hierarchy over six months to gauge the potential impact of three technological trends – Robotic Process Automation (RPA), Advanced Analytics, and Artificial Intelligence (AI) – on them. A total of 40 jobs were found to be highly impacted, meaning that it had the potential to be merged or completely displaced as many of the tasks associated with the role were prone to automation.

Some of these roles include mortgage specialist, relationship manager (SME), fund accountant, trader, and many more. Although the report acknowledges the impact on these jobs, it does not provide a conclusive timeline as to when they will be affected. However, it is safe to say that it could be as soon as two to five years simply due to the rapid evolution of the finance industry. This highlights the widespread impact that technology will have on the sector, with three common narratives peppering the findings:

A need to move away from silo functions

Employees must be increasingly agile to be able to fit into cross-functional teams and organisations. This means they must pick up new skills in order to replace their old tasks, which would be automated by technology. For example, those in charge of developing trading algorithms in investment banks would require interpersonal skills to be able to work closely with analysts, traders and technology specialists.

Roles to be converged instead of eliminated

There is a common misconception that the introduction of technology and AI will mean that jobs cease to exist. However, the report found that role convergence was the more likely outcome when considering functions that would be automated. For surveillance jobs, employees would now have to pick up the advanced digital skills needed to operate AI-enabled machines as well as understand the technology in order to provide predictive insights, whereas previously they would have only needed to handle either trade or transaction monitoring.

Human expertise will always be in demand

Reiterating the point above, AI may be able to outperform humans, but the creativity and innovation needed to find new solutions to problems will always be beyond the capabilities of a machine. There will still be a strong need for “oversight, results interpretation, and exception management/processing”, especially with many financial institutions still using core banking systems that are decades old. The transition to AI and technology is not a matter of plug and play, so there is still a need for executives that understand both the old and the new worlds in order for implementation to occur.

The findings of the report strongly suggest that is it necessary for current executives to upskill themselves to keep up with the evolving nature of the finance industry due to the introduction of technology. Courses that offer an introduction to Fintech can help learners to understand this changing landscape, allowing them to stay relevant in the field.

Although it is clear that the world of finance is on the verge of a radical change, with the report acknowledging that investment will “enhance competitive positioning, generate cost savings, enhance operating efficiencies, and streamline compliance procedures”, it fails to conclude when these will become commonplace. This is in addition to organisations actively exploring roles and tasks to “proactively prepare for changes” that will be brought about as a result of data analytics and automation. 

Bill Gates once said “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.” For many organisations and executives in the world of finance, these words could not ring truer. 

In short, finance professionals still have time to prepare themselves for the next big wave of change. However, the question is how many will?

About CFTE

We are a platform supported by senior leaders from the largest institutions, startups, and universities. We address the needs of professionals in finance to upskill in a rapidly changing industry being transformed by emerging technologies. More than 50,000 participants learn from our online courses, such as AI in Finance, Fintech Foundation or Extrapreneurship, a mini-MBA with fast-growing startups such as Revolut or Shift Technology.

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