Machine learning technology is poised to be huge thing in financial services. In fact, two-thirds of UK-based firms are already using it.
That is according to two of the UK’s top financial regulators. The Financial Conduct Authority (FCA) and the Bank of England have taken a deep dive into how the financial services industry in the country is using machine learning.
The research is based on a survey sent out to 300 firms, including banks, credit brokers, e-money institutions, financial market infrastructure firms, investment managers, insurers, non-bank lenders and principal trading firms. Of those, 106 responded.
The researchers found that, of the people polled, two-thirds of respondents report they already use it in one way or another. The median firm uses live machine learning applications in two business areas and this is expected to more than double by 2022.
The FCA and the Bank of England also found that one-third of machine learning applications are used for a considerable share of activities in a specific business area. Deployment is most advanced in the banking and insurance sectors.
From front-office to back-office, ML is now used across a range of business areas. Machine learning is most commonly used in anti-money laundering and fraud detection as well as in customer-facing applications like customer services and marketing. Some firms also use ML in areas such as credit risk management, trade pricing and execution, as well as general insurance pricing and underwriting.
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