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Blockchain and cryptoassets have, and rightly so, received a large amount of coverage and analysis during the last few years. In the background, and potentially representing technology tools and applications that might be more applicable for most organizations at this stage, artificial intelligence has continued to permeate an array of industry verticals.
With the continuous debate around leveraging artificial intelligence to help transform autonomous vehicles from concept to reality, AI represents an equally hot topic. Even with this continued development and integration, however, there remains some ambiguity and confusion as to how this technology will impact the broader accounting and financial services sectors.
Some of this confusion comes from the conflation of AI with other automation technologies, some arises from the deluge of other technology tools — like blockchain — driving innovation in the market, and a portion is derived from the fact that AI is not any one single thing, but rather an umbrella term.
For any emerging technology, including blockchain, to operate as effectively as advertised, practitioners must not understand that specific tool, but how it connects with other cutting-edge tools such as AI.
Read these excerpts from my new book Blockchain, Artificial Intelligence and Financial Services – Implications and Applications for Finance and Accounting Professionals, where I begin to tackle some of the issues so important to accounting and finance professionals:
“The dual headed disruption tidal wave of blockchain enabled activities and artificial intelligence will invariably lead to anxiety, stress, and potentially misunderstanding of just what these technologies represent for financial services. Blockchain, hopefully, at this point has been demystified to a certain extent, but the idea of artificial intelligence may appear and seem like a more amorphous concept that is both difficult to understand but potentially disruptive in nature. While artificial intelligence has been featured in numerous media outlets, movies, and T.V. shows, the image that is most often presented to audiences and market actors is one that, almost invariably, has negative connotations and implications for the developers and users. Fortunately, while there have been numerous advances in the development and implementation of artificial intelligence, the limits of current iterations are still substantial. In other words there is no need to fear the Terminator coming for financial practitioner roles. Prior to diving into what the applications and implications of AI may very well be, however, it seems appropriate to first put forward a definition that makes sense in the context of this discussion. Not meant to be overly technical, but rather a working definition to assist financial professionals seeking to understand and explain the implications of AI, a working definition as follows is a workable option:
Artificial intelligence is either a computer program or suite of programs that can either augment or eventually replace the need for human engagement and oversight in entire processes or at least portions of processes.
Artificial intelligence may have initially received more attention and media coverage but has subsequently received less coverage and analysis recently due to the somewhat amorphous nature of the idea itself (Lee, 2018). Blockchain and cryptocurrency may also be difficult to understand and appear to be a relatively new concept in and of itself, but even in spite of this initial confusion and analysis there are similarities between these technology tools and preexisting options. A decentralized ledger system, otherwise labeled as a decentralized ledger technology (DLT) platform is, of course, different from current centralized options, but underlying components can be related to tools like Excel and Access. Additionally, cryptocurrencies are simply a representation of how several technology tools and aspects have been combined, namely the tools of encryption, peer-to-peer processing ability, and various components of consensus data verification are not, by themselves, innovative or unique.
Contrasting versus these tools or platforms, the idea and concept of artificial intelligence can appear to be murky and lacking a relation to current technology or processes. Also, especially for financial services professionals, the challenges and threats of automation, digitization, and increased efficiency do have the potential to displace and disrupt core functions of what financial professionals actually perform. It is true that automation and digitization are not new issues and trends in the accounting and financial fields, but these do seem to be accelerating as well as mirroring events that have already occurred in other industry sectors (Mehendale, 2018). Examples abound in the marketplace, including a recently highlighted example of how J.P. Morgan is leveraging artificial intelligence tools to improve the speed and efficiency with which contracts and other paperwork are reviewed and analyzed. This example, however, is only one example of how artificial intelligence is being used in the marketplace, not even drilling down into the work underway at IBM.”
“Artificial intelligence is often tossed around and discussed as if it represents on type of platform, technology, or platform, but this represents an incomplete view of just what AI means and can imply for professionals and organizations. Without diving too much into the technical weeds of the different classes and types of AI, the following categories are included but not limited to:
1) Computational AI
2) Linguistic AI
3) Spatial AI
4) Reactive computing
5) Limited Memory
6) Theory of mind
It is impossible to predict just how the simultaneously developing technologies of artificial intelligence, blockchain, robotic process automation, and other automation tools will ultimately impact the accounting and financial services space. Predicting the future is, even under the calmest conditions, a difficult task and it would be difficult to categorize the current business landscape as calm.
Blockchain has, and assuredly will, continue to occupy a prominent place in the technology conversation for years to come, but it is not alone. For practitioners and organizations to both recognize the benefits of emerging technologies it is important to understand them both as individual tools and as complementary resources.
With implementation and adoption continuing to accelerate both inside and outside of the financial services space, proactive practitioners and firms are well positioned to thrive. No matter what aspect is analyzed, it would be safe to say that 2020 is shaping up to be an exciting year.
Be sure to check out my new book, available here and at most major retailers.