AI - Artificial Intelligence
Posted on 21st July 2024 at 17:38
We are entering an era of huge technological advancements and artificial intelligence (AI) is very much at the forefront.
What exactly is AI? It is a type of technology, under the umbrella of computer science, which allows machine and computers to simulate human functions, such as decision making, problem-solving and intelligence. AI can “learn” from huge chunks of data and make predictions and find patterns, from images, video, software code and even human language.
Most will have heard of Chatbots or ChatGPT, which made a breakthrough in 2022, which allows users to engage in a humanlike conversation. The AI will pull from a significant amount of data to formulate answers to questions, offer advice and generate content, such as articles and social media posts.
What does this all mean for the world of Insolvency Practitioners (IP)? Whilst there are benefits to the processing and analysing of data, IP ‘s have a deep and complex understanding of financial situations, regulations and negotiating with creditors. Can AI replace years of expertise, sound judgement, let alone have the potential to use inter-personal skills required to navigate difficult insolvency situations?
Advantages:
o AI can analyse vast quantities of financial data to help identify patterns and trends.
o Predictive modelling can help to alert any potential insolvency risks by comparing historical financial data
and analysing market trends.
o AI can boost fraud detection capabilities, finding irregularities or suspicious activities in financial
transactions.
o Customer interaction, through chat capabilities.
o AI can assist IP’s in making informed decisions by providing insights and recommendations based on the
analysis of complex financial and legal info.
o AI tools can manage and process large volumes of documents and financial records.
o AI can reduce costs by handling tasks that normally require manual labour, such as data entry,
document review, and administrative processes.
Disadvantages:
o AI will struggle with complex decision making, sound judgement and a depth of understanding of the
subject.
o AI does not have any emotional intelligence to be able to deal with distressing situations or offer
empathy.
o AI algorithms rely on the information they analyse being accurate and up to date, therefore any
discrepancies or incomplete data will lead to skewed or inaccurate results.
o Privacy concerns with the handling of sensitive personal and financial data.
o Building relationships with clients and partners requires trust and great interpersonal skills. AI lacks this
ability to build rapport and communicate unlike a human.
o Who takes responsibility when decisions or actions are challenged? Who is accountable for any
unintended consequences? There are serious ethical and legal implications which need further
consideration.
Whilst there are promising capabilities and advances in AI, I believe that the role and expertise of an IP cannot simply be replaced by automation. Human judgement, emotional capacity, adaptability, and the ability to build working relationships are qualities that are so deeply embedded, that no machine can possibly fulfil these functions to the same level. The future, however, may be one of collaboration, whereby AI enhances those professional abilities and focuses on reducing data heavy and time limited tasks.
In 2014 Stephen Hawkins commented that the AI developed thus far had already proved particularly useful, but he fears the consequences of creating something that can actually match or surpass humans. He stated, “The development of full artificial intelligence could spell the end of the human race."
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