Artificial Intelligence (AI) and robotics for industry are believed to lead to increased efficiency, productivity and drive innovations.

The adoption of Artificial Intelligence (AI) technology and robotics in advanced countries for business growth is spreading to Asia, with banking players bracing for the AI-based new economy, as machine learning is predicted to become mainstream in the region by 2030.

AI is viewed as a set of tools and programs that make software ‘smarter’ in such a way that an outside observer thinks the output is generated by a human, according to IBM senior vice president cognitive solutions and research John E. Kelly III.

“In essence, one can perceive AI, at least in its current form, to be like a normal human brain with functions like common-sense reasoning, forming an opinion and social behavior,” he opined.

He said AI had the potential to benefit businesses through significant cost savings due to its high scalability, an elimination of both omission and commission errors and the ability to instantaneously document and optimize processes.

The evolution of AI has gone through three stages: artificial narrow intelligence (ANI), artificial general intelligence (AGI) and artificial super intelligence (ASI), he explained.

“The transition from the first (ANI) to the second (AGI) phase has taken a long time, but we believe we are currently at the final stage of this transition – in which the intelligence of machines can be equal to humans,” he noted.

In this initial stage, AI has been largely restricted to powering the machine intelligence of “the industrial automation and robotics industry, and has gradually expanded into drone and autonomous driving applications,” he said.

“It is likely that by 2030, AI will be as commonplace in society as internet-ready devices are today,” he predicted.

The United States, the United Kingdom and Japan with its offerings in the industrial robotics segment, have seen significant progress in the AI world, partly because the industry and its research efforts have been concentrated mainly in developed countries, according to Elon Musk, the co-founder, CEO and product architect at Tesla.

“Asia has been a late entrant in the AI world,” he noted.

“The good news, however, is that Asian corporates and governments have realized the importance of AI as a strategic advantage for the region in the long term and have accelerated efforts to narrow the gap over the past three to five years,” he said.

A vast and emerging talent pool, and freedom from legacy assets have been identified as among the strengths that Asia has in developing AI. “Late adoption of technology could become a blessing in disguise for Asia as it can leapfrog to the most advanced technologies, bypassing some of the existing inefficient systems and processes,” he said.

Despite the vast talent pool and freedom from legacy assets, the fact is that Asia “is still a laggard when it comes to AI-based innovation,” he noted.

Today’s fourth AI-powered industrial revolution provides a unique opportunity for Asia, “as we believe Asia can be an early mover and begin to reap the benefits and thus, narrow the gap with developed markets”, he remarked.

Thanks to technological progress, such as Big Data and the rising adoption of the Internet of Things (IoT), which utilizes sensor technology, Asian factories should become more competitive in the future, one expert said.

Several Asian major corporates, including banks, have jumped on the AI bandwagon, responding to the arising trend by pouring millions of dollars into the technology in order to reap the benefit of the new economy. UBS is one example.

UBS Asia Pacific president Kathryn Shih Co said, “what we are seeing today is the fourth industrial revolution, with digital being so important, with the increasing use of AI.”

“UBS invests billions of dollars into technology every year and we have the number one research house in investment bank globally. We need to add the AI and digital component so that we can reach more people, do it quicker and smarter.”

According to Kathryn, the financial services industry is the second-most technologically intense industry after the tech industry itself, with the pace of change increasing at an ever more rapid rate.

“The latest forecast by Gartner, Inc. says that worldwide IT spending is projected to total US$3.7 trillion in 2018, an increase of 4.3 percent from 2017 when spending was estimated at $3.5 trillion.”

Robotics and AI in the next five years will fundamentally change the banking business. “We believe that AI’s impact on Asia will be far-reaching over the next five decades, creating an economic value of US$1.8 trillion to $3 trillion a year by 2030 in the region, compared to a negligible impact currently,” she remarked.

AI will lower the cost to build up customer profiles and tailor the solutions for emerging players. “It is therefore imperative that existing bank and insurance firms take AI seriously and invest to maintain their differentiation,” she advised.

But she acknowledged that like any other revolutions, AI will impact some of the current jobs and transform business. “UBS’ Chief Investment Office estimates that between 30 and 50 million jobs in Asia alone could be potentially impacted in the medium-to-longer term across all industries.

“However, we believe that as overall employee productivity is expected to increase sharply with the wider deployment of AI technology, AI should ultimately create millions of new jobs in Asia. At the same time, it will also provide opportunities for employees to upgrade their skills and focus on other creative and value-added areas.”

According to her, UBS has some 700 robots operating globally, about 100 of which are operating in China.

“They are improving our operational efficiency, performing tasks like testing portfolios. We think there will be more to come – the robot can process more data in a nano-second than a person can in a day.

“So we are investing heavily in this space and we are investing in our people as the changes are throwing up opportunities in other fields. We should not fear AI but seek to adapt to it in a positive way.

“The human workforce is resilient, and flexible, and adapted repeatedly to technological advancements over its history. The workforce of the future is going to be even more adaptable and multi-skilled,” said Kathryn, also a member of the Group Executive Board UBS Group AG and UBS AG.

SoftBank’s founder and CEO said Asian financial services “are already under the process of disruption by internet firms, as evidenced in large markets like China and India, and AI will take this disruption to the next level.”

“The low-hanging fruit for AI within the Asian financial crisis industry is to leverage virtual assistants, chatbots, or speech recognition software for regular customer interactions, thereby lowering the dependence on traditional banking channels like branches.”

“Asian major banks should get a major boost to risk management, which is traditionally a weak spot, as AI can help better manage credit-risk assessments and anti-money laundering programs.”

He said that in the longer-term, as robot advisors became more sophisticated, Asian banks could further utilize the technology in product marketing and sales.

Aside from financial services, AI is expected to impact four other industries: healthcare, manufacturing, retail and transportation.

With respect to healthcare, the key applications where AI holds promise in the region include decision-making support during clinical trials, robots to assist in surgery and patient monitoring, and managing healthcare data.

“If a company fails to take advantage of AI, then there is the possibility that they may be left behind,” said Baidu Silicon Valley Ai Lab director Adam Coates.

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