The Banking Executive Magazine - July 2023 Issue

AI Revolution As we stand on the precipice of a technological revolution poised to alter the global economic landscape, we must grapple with the impending challenges and rewards that artificial intelligence (AI) will bring. Alphabet CEO Sundar Pichai predicted that AI's impact would be "more pro- found" than fire or electricity, fore- telling a future that could fundamentally reshape our relation- ship with work and wealth. AI's technological advancements are propelling us towards a labor-less economic model. In this brave new world, demand for human labor could decrease while productivity levels soar. The 'human worker', a once integral cog in the economic machinery, may find themselves in- creasingly sidelined as AI technolo- gies take over. Back-office support, legal services, and accountancy sectors appear to be in the immediate line of fire. With language tasks accounting for 62% of employees' time, innovations like large language models, such as Chat- GPT-4, could affect an estimated 40% of all working hours. Given the pervasive nature of AI, no sector re- mains immune. In fact, a recent re- port by Accenture suggests that 65% of the time spent on language tasks could be transformed into more pro- ductive activity through AI augmen- tation and automation. These gains in productivity aren't negligible. A new McKinsey report estimates that the AI-driven produc- tivity boost could add a staggering $2.6 to $4.4 trillion in value to the global economy annually. But while these numbers sound promising, we cannot overlook the other side of the coin – the imminent decline in de- mand for human labor. The threat of rising unemployment is a specter that looms large. The Inter- national Labor Organization reports that global youth unemployment rate has been on an upward trajectory, from 12.2% in 1995 to 15.6% in ISSUE 175 JULY 2023 the BANKING EXECUTIVE 17