More than Just Games: Banking with Artificial Intelligence

As games go, Go is among the oldest and most revered. It’s somewhere around 2,500 years old, originated as a symbol of high culture in China and really does involve a high level of strategic complexity. Even the modern incarnation of the game dates back to the 15th century.

That’s why the epic match just played in Seoul, South Korea, is causing so much buzz. Here’s the simple reason: Lee Sedol, widely acknowledged by those who acknowledge these things as one of the best players around, took on AlphaGo, an artificially intelligent system from DeepMind, the London-based AI lab owned by Google. And after a furious, best-of five contest, the machine won four. In one of the world’s oldest games, the newest technology crushed the best mankind has to offer.

But there’s more to the soul-searching in Seoul. And it leads straight to the banking business.

First, it was surely inevitable that a machine would one day beat the world’s best player. It’s been more than 20 years since a software program beat one of the best players in checkers, and champions have since been toppled in chess, Othello, poker, Jeopardy and many more fun pastimes. Yet Go was considered something different: researchers estimated as recently as two years ago that would take another decade of development for this particular milestone to be reached. Well, so much for that prediction.

Second, it’s not as if programmers built the program, known as AlphaGo, specifically to be the best Go player. The truth is that the program mostly taught itself: It studied the intricacies of 100,000 matches, then proceeded to play against itself, improving all the while. It has two neural networks—one to figure out the best move in a given situation, the other to constantly evaluate who’s ahead in the game.

And here’s the best part: To no one’s surprise, the folks at Google swear that that technology underpinning of AlphaGo is broadly applicable. Those algorithms, and the programs used to run them, can be directly applied to numerous fields, from education and health care to law and, yes, banking.

Consider U.K.-based Atom Bank, a brash startup that hasn’t even started up, thought it has been licensed. It’s out to revolutionize the banking experience with every kind of innovation, form customers getting their own visual brand (it’s up to 1.4 million logos) to biometric and facial recognition security tools. And in March, it announced a new virtual agent that responds to customer queries from an AI bot embedded within the mobile app.

The answers don’t just come from a pre-developed list—the technology analyzes the context of each question, and enhances the answers with increasing relevance. Again, more than just providing canned answers in a robotic manner, the neural networks simulate human-brain patterns to keep making the responses better and more customized.

Artificial intelligence is getting some powerful supporters, and detractors. Earlier this year, Facebook founder Mark Zuckerberg caused quite a stir when he posted that his personal challenge for 2016 is to build an AI bot that helps him run his home and do his work. (Of course, when Zuckerberg builds something for himself, it can get reach many other people—look how many people now have ‘friends’ the way he did when he created his social network. )

“Artificial intelligence may seem like something out of science fiction, but most of us already use tools and services every day that rely on AI,” he posted. “When you do a voice search on your phone, put a check into an ATM, or use a fitness tracker to count your steps, you’re using basic forms of pattern recognition and artificial intelligence. More sophisticated AI systems can already diagnose diseases, drive cars and search the skies for planets better than people. This is why AI is such an exciting field — it opens up so many new possibilities for enhancing humanity’s capabilities.”

Others are less entranced. Elon Musk, who’s no slouch in the innovation department himself—he’s helped spearhead such game-changers as SpaceX, Tesla Motors, and PayPal—is one of the founders of Open AI, a non-profit looking to develop open-source technologies that benefits consumers. He famously dubbed AI the ‘biggest existential threat’ to humanity, but also sees its inevitability, hence his initiatives.

As the AlphaGo advance proves, there’s more AI coming, and faster than even futurists imagined. Every industry will be affected, and every company will adapt or face problems. Some institutions like Barclay have jumped on the bandwagon with well-funded research efforts. But is the industry overall ready?

Written by Jack Dougal

Jack Dougal

Jack Dougal is's resident news reporter. He writes regular blogs covering the latest stories and key developments in the global financial services industry.

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