It might be relatively late in coming, but artificial intelligence (AI) is gradually making its way into the banking industry, reports Euromoney.\nFinancial institutions have not been as aggressive as technology companies such as Microsoft, Google and Facebook in implementing AI, but they are making headway, though cautiously, in snatching up talent and companies here and there. Hedge fund Bridgewater Associates has hired IBM’s former chief engineer, who designed IBM’s Watson supercomputer. BlackRock, the behemoth of fund management, has entered into a joint venture with Google, and Goldman Sachs has invested in promising AI startups, notably Kensho, a financial research platform.\nMany believe the move is inevitable. "Technological competence is absolutely essential for at least staying in the game,” Neil Dwane, global strategist at Allianz Global Investors, told Euromoney. “You may still lose, but if you’re not in it, you have no hope of winning."\nUnlike general AI, the kind that is found in sci-fi films with machines that possess superhuman brainpower, the AI that is likely to be used in financial services is called narrow artificial intelligence. These types of applications take on specific tasks involving problem solving, deduction, reasoning and natural language processing. Some programs use natural language processing to manage inquiries from customers; others are used to conduct financial research or identify trading opportunities.\nThe main areas where AI will be applied are risk assessment, portfolio management, trading, financial analysis and IT.\nJob cuts are virtually inevitable. As Sean Park, founder of Anthemis, a fintech venture capital firm, puts it, "The scary thing about AI and machine learning is that you don’t necessarily see a slow linear shift towards technological automation. It’s more that, in some banking businesses where there is an obvious and immediate application, the 100 people that once ran that business can be reduced to just 10 or five, or even no one in some cases."