AI: Friend or foe? | Philstar.com

BYTESLito Villanueva – The Philippine Star
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October 17, 2024 | 12:00am

Artificial Intelligence (AI) was a hot topic at the Manila Tech Summit in August.

Is AI something to be feared or fawned over? Is it a catalyst for change or a cause for concern?

AI has swiftly become a central topic of discussion in technology forums and fintech conferences, particularly in Southeast Asia, where digital transformation is rapidly accelerating.

I’ve observed firsthand how AI has transformed the fintech industry in the Philippines and beyond. It has helped democratize access to financial services, making banking and financial management more efficient, personalized and secure. However, alongside its remarkable benefits, AI brings with it a set of challenges that cannot be overlooked. As with any emerging tech, there are cautionary boundaries and regulation concerns to consider before its mainstream adoption.

Southeast Asia has seen a surge in AI adoption across various sectors, from finance to healthcare to logistics. AI-powered tools are helping businesses automate processes, analyze data at astounding speeds and deliver personalized services that keep the customer at the core. It was reported that the technology with the “Greatest Impact for Disruption” from the last five years (2019-2023) is Artificial Intelligence at the top (70 percent), followed by cloud computing (10 percent) and blockchain (six percent).

According to a Goldman and Sachs study, Generative AI could substitute up to one-quarter of current work in the US and Europe by 2030. The potential job loss due to AI by 2030 is estimated at 85 million, but new jobs are estimated at 97 million (WEF 2023). Most businesses will have their own AI-powered alter egos or chatbots – more empathetic, smarter, patient and available 24/7.

Per IDC, Southeast Asia’s AI spending is expected to reach $5.5 billion by 2025.

AI is revolutionizing how we interact with financial services and with the consumer. Banks and fintech companies across the Philippines are leveraging AI to streamline loan approvals, offer curated products, detect fraud and provide 24/7 customer support.

During the summit, the question was raised: Should AI be designed to prioritize human values or ethics? Or should it be value-neutral or solely goal-oriented?

It was discussed that how it’s utilized depends on the specific goals set for it. If AI is purely goal-oriented, such as in warfare, it could be instructed to win at all costs, potentially leading to ethical dilemmas. For example, if AI’s objective is to win a war, it might calculate that wiping out large populations, like an entire city, is the most efficient path to victory. In this scenario, no ethics guides the decision; it is just a focus on achieving the goal.

On the other hand, an AI that includes ethical considerations would approach the same problem differently. Instead of maximizing destruction, it might prioritize achieving victory with the least harm.

This distinction between goal-oriented AI and ethically guided AI is crucial. There is a possible risk of letting AI take the wheel

altogether – how can we ensure that the balance between efficiency and ethics remains stable? We cannot eradicate human judgment.

The impact of AI largely depends on how it is designed and used. Ethics may not be a factor in specific applications, like playing games. However, ethical considerations must always be part of the equation in more complex scenarios. There are two sides to the coin.

The summit sparked much-needed conversation about AI’s duality. Bias and hallucination issues in AI are being addressed, but the conversation about ethics in AI development is just beginning. That is why it is crucial to first define what ethics mean in different contexts. What is our ethical framework? What regulatory standards do we need to adhere to? How do we program AI to work for us and not against us?

There has also been a hot debate about whether AI adoption should be minimized due to another ethical concern regarding the loss of jobs. AI is a magic tool of efficiency and accuracy, but it is so powerful that it can accomplish specific tasks just as well as people (most of the time, even better).

Should governments intervene and place restrictive measures?

As AI continues to automate tasks, there is a growing fear that many jobs, particularly in low-skilled sectors, will be compromised. Labor laws in the Philippines already allow companies to terminate employees if labor-saving devices, such as AI, are implemented. This is a recognized ground for redundancy and as long as labor laws are followed, it can be managed. However, the real challenge is for governments to create new job opportunities that can accommodate the workforce displaced by AI.

Governments and businesses must invest in reskilling and upskilling the workforce to adapt to this new technology-dependent reality while increasing digital literacy to ensure people are included. Sustainable innovations are imperative.

The summit also discussed the broader policy approach. The Triple Helix model – where the government, academia and the private sector collaborate – can be key to addressing the workforce challenges posed by AI.

Reports from McKinsey and Goldman Sachs predict that AI will affect millions of jobs in industries like manufacturing and marketing. This shift will require flexible regulatory frameworks that protect consumers without stifling innovation.

AI is not just black or white. It has dual sides: benefits and risks, wins and losses. It is undoubtedly a life-changing tool that can either help us build a more inclusive and prosperous future or further increase the class and digital divide. It is our choice. AI is what we humans make it to be.

Lito Villanueva is the Philippines’ leading thought leader in inclusive digital finance. As EVP and chief innovation and inclusion Officer at RCBC, he has led award-winning digital initiatives at scale. He is also the founding chairman of Fintech Alliance PH, overseeing 95 percent of the nation’s digital retail financial transactions. He is the first global chairman of the South Africa-based Alliance of Digital Finance Associations and a co-founder of the Asia FinTech Alliance.

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