Artificial intelligence and automation is not all good news. It is changing the very nature of society in China and will destroy loads of jobs in the financial services. We need to take care as how we manage their impact.
China’s rating of a “good” citizen
John Naughton in The Guardian reports that the Chinese government is “adapting the ubiquitous “reputation rating” system by which online platforms try to get feedback on vendor and customer reliability. The government is beginning to roll out its social credit system, which is designed to “raise the awareness of integrity and the level of trustworthiness in Chinese society”. It will focus on four aspects of behaviour: “honesty in government affairs”, “commercial integrity”, “societal integrity” and “judicial credibility”.” So instead of rating people’s credit worthiness they are rating how “good” a citizen is.
Naughton reports, “Everyone starts off with a baseline allowance of, say, 100 points. You can earn bonus points by doing “good deeds” such as separating and recycling rubbish. On the other hand, behaving in what is regarded (by the state) as antisocial behaviour can lose you points. Examples of deductible behaviour can apparently include: not showing up at a restaurant without cancelling your booking, cheating in online games, leaving false product reviews and even jaywalking. And if your social credit score is too low, you find yourself barred from taking flights or travelling on certain trains.”
Loss of jobs
Yesterday Citi Bank’s Jamie Forese, President and CEO of the bank's institutional clients group, said in an interview with the Financial Times that it could shed half of its 20,000 tech and ops staff in the next five years due to the rise of robotics and automation. He explained that 20,000 operational staff account for more than 40% of the bank's total employees and are "most fertile for machine processing”.
John Cryan at Deutsche Bank made similar prediction for his bank, as did Richard Gnodde, head of Goldman Sachs International.
CTMfile take: Some corporate treasury departments are already too small to cover staff absences and more will be forced to follow. Corporate treasurers need to think of new value adding long term projects that they can take on board. AI and automation needs to be managed sympathetically and strategically, it is not all about cost saving.
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