The risks of emerging technologies

The news this week has been saturated with stories about the World Economic Forum - putting aside your opinion on the relevance of this annual gathering, it is especially interesting that after such a threatening year to the group’s socially progressive messages a key concern under discussion is society’s inability to keep pace with advancing technology.

Should the financial services industry be more aware of the risks surrounding artificial intelligence, blockchain and the internet of things before readily adopting these digital transformations?

Among the topics to be covered in Davos, new disruptive technology such as AI is taking a lead role - with the WEF’s Global Risks 2017 report warning it could pose a threat to employment, destabilise economic growth and exacerbate social unrest.

It is increasingly apparent that the expansion of AI may lead to fewer job opportunities as machines take over roles across sectors, and self-employment in the gig economy will leave individuals with greater financial responsibility for the costs of sickness and old age.

And while the positive convenience of an interconnected network of devices - with control over environments, appliances and accounts merged together - is clear, less obvious is the exposure this creates. Could it facilitate attacks to physical infrastructure and personal data?

The WEF argues that there is a lack of governance among emerging tech in a variety of spheres, and that their risk management is misdeveloped. Although we have not witnessed catastrophic events related to the latest advances as yet, the message from Davos is that too often the dangers of innovation are addressed retrospectively.

While fintech businesses are quick to prove regulatory viability through accreditation from financial authorities, and traditional lenders are keen to invest in providers of disruptive technologies, are either doing enough to ensure a sustainable digital future?