Page 42 - The European Business Review

Machine Intelligence

Importantly, the system assigns each client a global risk The true disruptors won’t be
score to assist in internal decision-making and to allow us to startups; rather, they will be deep-
use advanced analytics.
Another example is compliance with regard to politically pocketed technology behemoths,
exposed persons, where we were able to speed up internal spreading their tentacles into the world
assessments by 60% while reducing related costs by as much
as 40%. Machine learning accelerates and streamlines inves- of finance as cross-boundary disruptors.
tigation reviews by over 80% – while covering 20% of the
information. Furthermore, when it comes to employee
surveillance, we now have the capability to screen a substan- Consequently, they naturally turn to new segments outside
tial number of activities and check them against an extensive RI WUDGLWLRQDO ÀQDQFLDO LQVWLWXWLRQV 7KLV GRHVQ·W PHDQ WKDW
list of potential risks. big banks will disappear. But if they aren’t prepared, they
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DNLQ WR WKH HDUO\ SKDVHV RI HOHFWULFLW\ ZKHQ LW ÀUVW DUULYHG but certainly not key, with margins so low that they are
and replaced steam power in manufacturing. At the turn hardly attractive to anyone, including investors. This is why
of the century, most textile factories were still powered by all big banks must push AI to the next level, while time is
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engines had to accommodate pulleys, belts, rotating shafts,
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such a factory was built around a rigidly imposed, central- Urs Rohner has been the Chairman of the
LVHG VWHDP HQJLQH VDFULÀFLQJ DOO SRVVLEOH ZRUNÁRZ HIÀFLHQF\ Board of Directors of Credit Suisse Group
Interestingly, when manufacturers began to adopt electricity, AG since 2011 and was its Vice Chairman
engineers couldn’t even fathom an alternative layout like the from 2009 until 2011. In 2004, he was appointed
modern-day assembly line. Rather, they grouped the electric a member of the Executive Board of the
PRWRUV LQWR D ELJ FOXVWHU IRUJRLQJ WKH EHQHÀWV RI GHFHQ- Group and served as General Counsel and as COO. Mr.
WUDOLVHG SRZHU LQ RSWLPLVLQJ WKH ZRUNÁRZ ,W WRRN DOPRVW Rohner graduated with a law degree from the University
another two decades before the manufacturers truly reaped of Zurich. He is admitted to the bars of the Canton of
WKH IXOO EHQHÀWV RI HOHFWULFLW\ 6 Zurich and the State of New York.
Today, most incumbent banks tend to frame AI as a cost- Howard Yu is an IMD Swizerland Professor of
cutting measure, substituting human labor in administrative Strategic Management and Innovation. He
processes. Though this is important, its biggest potential specialises in Technological Innovation, Strategic
LV OLNHO\ WR EH VR SURIRXQG WKDW LW ZLOO WUDQVIRUP ÀQDQFLDO Transformation and Change Management. He is
institutions as we know them. The true disruptors won’t a two-time prize-winning case writer awarded by
be startups; rather, they will be deep-pocketed technology the European Foundation for Management Development.
behemoths, spreading their tentacles into the world of He received his Doctoral Degree in Management from
ÀQDQFH DV FURVV ERXQGDU\ GLVUXSWRUV Harvard Business School. Prior to his doctorate, he worked
in the Banking Industry in Hong Kong.
Cross-Boundary Disruption
“Your margin is my opportunity”, Amazon’s CEO Jeff References
3ULFHZDWHUKRXVH&RRSHUV ´5HGUDZLQJ WKH OLQHV )LQ7HFKV JURZLQJ LQÁXHQFH RQ
Bezos reportedly once said. The biggest threats to big banks Financial Services”. PwC. Accessed November 30, 2017. https://www.pwc.com/
ÀQWHFKUHSRUW
DUH QRW ÀQWHFK VWDUWXSV EXW UDWKHU $PD]RQ RU *RRJOH 2. Buchanan, Leigh. “American Entrepreneurship Is Actually Vanishing. Here’s Why.”
who shift the industry value chain. These and other cross- Inc.com. Accessed November 30, 2017. https://www.inc.com/magazine/201505/leigh-
buchanan/the-vanishing-startups-in-decline.html.
boundary disruptors, including Alibaba in China, have been 3. “What AlphaGo Means to the Future of Management”, MIT Sloan Management
Review, http://sloanreview.mit.edu/article/tech-savvy-what-alphago-means-to-the-
leveraging the existing data they have harvested through future-of-management/ (accessed May 28, 2017).
e-commerce and then specialising in new services targeting 4. Christof Koch, “How the Computer Beat the Go Master”, 6FLHQWLÀF $PHULFDQ, March
KWWS ZZZ VFLHQWLÀFDPHULFDQ FRP DUWLFOH KRZ WKH FRPSXWHU EHDW WKH JR
customers outside of big banks. Unlike a startup, which is master/.
&DGH 0HW] ´,Q 7ZR 0RYHV $OSKD*R DQG /HH 6HGRO 5HGHÀQHG WKH )XWXUHµ Wired,
forced to enter an existing space to gather customer informa- March 16, 2016, https://www.wired.com/2016/03/two-moves-alphago-lee-sedol-
tion, these tech giants have already acquired huge volumes UHGHÀQHG IXWXUH
6. Andrew McAfee and Erik Brynjolfsson, Machine, platform, crowd: harnessing our digital
RI GDWD EDVHG RQ FRPPHUFLDO DFWLYLWLHV RXWVLGH RI ÀQDQFH future (New York: W.W. Norton & Company, 2017), 18-20.

42 The European Business Review January - February 2018