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Three waves of autonomy: financial sector hit first

Analysis by PwC had broken down the automation of work into three phases, estimating that the use of algorithms, robots and automated/AI processes will gradually be introduced into the workplace over the next 20 years. It identifies three overlapping waves between now and the mid-2030s. They are as follow:

1. Algorithms – could affect 3% of jobs by early 2020s

This is already well underway and involves automating structured data analysis and simple digital tasks, such as credit scoring. This wave of innovation could come to maturity by the early 2020s, says PwC.

2. Augmentation – could affect 19% of jobs by late 2020s

This phase is also already underway but likely to come to full maturity later in the 2020s. The augmentation wave is focused on automation of repeatable tasks and exchanging information, as well as further developments of aerial drones, robots in warehouses and semi-autonomous vehicles.

3. Autonomy – could affect 30% of jobs by mid-2030s

The autonomy wave could come to maturity by the mid-2030s, AI will increasingly be able to analyse data from multiple sources, make decisions and take physical actions with little or no human input. Fully autonomous driverless vehicles could roll out at scale across the economy in this phase, for example.

The estimates of what share of work could be replaced with new technology is based on PwC's analysis of 200,000 workers in 29 countries in different industry sectors and with different educational backgrounds, ages and gender. But there is good news, as PwC economist John Hawksworth, co-author of the study, points out that just because a process or role can be automated, doesn't mean that it will be. Automation doesn't always mean improved performance (think of machines that make coffee at the press of a button, compared to a human who knows what they're doing). Hawksworth commented: “Our estimates are based primarily on the technical feasibility of automation, so in practice the actual extent of automation may be less due to a variety of economic, legal, regulatory and organisational constraints.”

Automation the wealth creator, job-maker

He also points out that, while some jobs will be lost, other will be created: “Furthermore, other analysis we have done suggests that any job losses from automation are likely to be broadly offset in the long run by new jobs created as a result of the larger and wealthier economy made possible by these new technologies. We do not believe, contrary to some predictions, that automation will lead to mass technological unemployment by the 2030s any more than it has done in the decades since the digital revolution began.”

Financial services aligned with algorithm usage

Some sectors are likely to suffer more than others – transport worker jobs are more likely than most to be automated in some way during the third wave, as autonomous vehicles are introduced. The report states: “In the shorter term, sectors such as financial services could be more exposed as algorithms outperform humans in an ever wider range of tasks involving pure data analysis.”


This item appears in the following sections:
Operations
Best Practices & Benchmarking in Operations
Risk Management
Financial Risk Management
Treasury Careers

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