The future of banking and fintech


By Rob Whiteman CBE, CIPFA CEO

In the last decade, we have started to see examples of machine learning appear throughout public services. The Met Police are utilising AI in their facial recognition technology. Health Secretary Matt Hancock has advocated for a chatbot service for healthcare triage. Blackpool Council is using artificial intelligence (AI) to detect road damage and deploy repairs.

Such examples represent only the beginning of opportunities presented to the public sector by greater adoption of AI. In two thirds of jobs, it’s estimated that around 30% of tasks could be automated by AI.

Let’s face it: no accountant (or very few at least) only go into the public sector because they just love financial reporting. They certainly don’t do it for the pay. Those who choose a career in public service are largely driven by a different ethos, namely a desire to make a difference. Introduction of automation could mean that many of the tasks that pull finance professionals away from activities specifically dedicated to public service could be removed from their roles. This could provide more time in the day for the more compelling bits of the job that machines cannot replace, including strategic thinking, stakeholder engagement and problem-solving, as opposed to mundane data procurement and organisation tasks.

AI can also help eliminate human error and fraud through effective and consistent pattern recognition in data analysis. The best technology is able to handle very large datasets, making it scalable to a number of different industries and sectors.

This is not to say that AI doesn’t present risks. While the robots taking over anytime soon is unlikely, it’s important to remember that these technologies are being developed by humans who themselves are capable of error and inherent, unconscious bias. A study by the AI Now Institute (New York University) attributed the existence of flawed systems that perpetuate gender and racial biases in part to the fact that the AI field is largely dominated by white men.

Examples cited in the report included image recognition services making offensive classifications of minorities, chatbots adopting hate speech, and Amazon technology failing to recognise users with darker skin colours. As the public sector strives to improve its approach to diversity and inclusion, it’s important for developers and users to be aware of these broader issues when adopting technologies that could be perceived as a means of objective decision making.   

Risks and benefits aside, compared to the pace of change across the rest of society, adoption of AI in the public sector is relatively slow. There could be a number of reasons for this. Most public services are facing high levels of financial pressure, with resources being prioritised towards statutory duties rather than investment in innovation.

Additionally, with new technology comes the requirement for new skills in public sector workplaces. This skills gap can be a substantial barrier to early adoption, however we can see evidence of public sector organisations recognising the need to address the issue. In 2017, 58% of public sector organisations surveyed by CIPFA felt that tech expertise would be a priority financial skill in ten years.

Bridging this gap will take time and resources, though in itself presents a further potential opportunity. CIPFA’s research has shown that one of the main issues affecting public sector workforce retention is a perceived lack of development opportunities. This need for a shift in skills presents an opportunity to offer what many staff may feel is lacking in their working lives.

AI has moved from the labs, into businesses, and into our homes. Many people now have an Alexa in their living rooms, Siri on their phones … it’s now possible to purchase a smart toaster that will learn your specific desired level of 'done-ness'! Suffice to say, AI has come a long way in a relatively short space of time, and people naturally expect services, both public and private, to keep up with the times.

The adoption of AI represents both risks and opportunities for the public sector, which has historically been a latecomer to technological change. However, as the world and the workplace becomes steadily more digital, it is vital that the public sector continues to move with, if not ahead of, the tide.

This article first appeared in Business Reporter.

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