Did the Royal Commission weigh in on AI?

Did the Royal Commission weigh in on AI?

 

Did the Royal Commission weigh in on AI?

Financial Services

 “ Trust” was one of the key issues identified during the Royal Commission.  To address this, AI (Artificial Intelligence) is being readily adopted by the Financial Services industry. Already it is going a long way to address the trust equation.

With analysts pressuring the industry to cut spending following the Hayne Royal Commission, the rapid adoption of automation technology has become a core strategic focus across the Australian Financial Services sector. We read almost daily of new biometric voice capability solutions and machine learning technologies. Adoption of these AI tools is both important and necessary to understanding customers at a deeper level and processing the accumulative levels of unstructured data in our industry.

Insurance and Superannuation technologies

Similarly in the insurance and superannuationindustry: Voice Recognition is being increasingly utilised. This form of AI can assist with identifying dishonest practices and It comes in the wake of the Banking Royal Commission.

This technology has been flagged as helping to improve its existing “time and resource-intensive” processes for reviewing sales calls. It will also be able to identify calls that contain factors such as tone, sentiment, hesitation, confusion or aggression, which may indicate that a customer is uncomfortable. This technology removes much of the unpredictable “human” emotive response.

A recent report in the Lucky Country Series however outlines that the future of work should actually retain a human face.

But maybe, the real elephant as you look around the room is definitely sitting or in the Human Resources corner.

With The Royal Commission findings so strongly weighted towards poor culture, inappropriate work patterns and behaviours, is it fair to say that the responsibility of this should fall on the Chief Human Resources Officer (CHRO) not the CRO? A Chief Risk Officer (CRO) needs good people and and it is the job of the CHRO to provide this.

Human Resources and the role of the CHRO

Human Resource experts say that theThe CHRO, is a strategic influencer at Board level. Effective HR governance, if applied properly, should surface rogue and unscrupulous behaviour.

As a risk management professional, we know that managing non-financial risk such as: misconduct, compliance risk, conduct risk and operational risk is much more difficult to measure than financial risk. Why then, with such high levels of sophisticated software solutions available in Human Resources, can’t “people risk” be easily identified, managed and therefore minimised?

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They key take out from all of this from a Risk Management perspective, is that Hayne didn’t necessarily weigh into AI, but the results and recommendations highlighted during the Royal Commission has highlighted the need for implementation of new processes, interventions and cost saving measures, resulting in less non-financial and financial risk.

By it’s very nature, The Royal Commission has had a direct impact on the way things are being done and will continue to be done in the Financial Services industry and in Risk Management in the future. Greater understanding and adoption of AI is key to avoid being left behind in the wake of the Royal Commission.

References:

http://www.insidehr.com.au/banking-royal-commission-hr-technology/

http://www.insidehr.com.au/hr-technology-core-hris-best-of-breed/

https://www.itnews.com.au/news/asic-banks-on-voice-analytics-for-life-insurance-sales-crackdown-524213

https://www2.deloitte.com/au/en/pages/building-lucky-country/topics/building-lucky-country.html

 

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