As a driving force of the new technology revolution, artificial intelligence (AI) has become a strategic focus worldwide. The Chinese government has established a development plan for AI. In order to gather the latest development situation and application of AI in China, XIN Real Estate Fintech Research, THUIFR, recently did an exclusive research on AI through gathering information from enterprises information, financing events and policies. The original report was published on December 20th 2018.
Key findings are:
Introduced the development and current situation of AI in China
Analyzed the difference of AI development between China and the US
Identified AI applications in finance, including AI customer service, Intelligent Quantitative Trading, security and robo-advisor.
The development of AI
Figure 1 Global AI Enterprise Distribution (Top 10 countries)
Figure 2 Number of Global AI Companies (Top 10 cities)
As of the first half of 2018, there were 4,998 AI enterprises worldwide, of which the US ranked the first with 2,039 enterprises and China ranked the second with 1040 enterprises. Beijing had the majority of AI enterprises, with about 412 AI companies. The number of AI enterprises in the US and China accounted for 62% of the world.
Compared with the US, the development of AI in China has several characteristics.
Currently, AI enterprises in China are more focusing on the application level, such as security, computer vision, voice recognition, and paying less attention to the fundamental level especially infrastructure.
The shortage of talents in AI research field has become a bottleneck problem for AI development.
Advantages of AI development in China
2.1. Users and market potential
The large population of users in China generated a large amount of data, which has provided a unique advantage for AI enterprises in China, especially laid a solid foundation for AI development and application.
2.2. Technology and innovation improvements
AI has been developing rapidly in China with the technologies of voice recognition and image recognition leading the world. In addition, the growth of innovation has provided huge support for AI to develop more application for different scenarios.
2.3. Huge capital power
The government put AI into a strategic level, the financing of AI is at a high level and it has an upward trend. From 2012 to 2018, the amount of investment in the AI field has increased from 1, 700 million to 12.8 trillion RMB.
The development of AI in the financial sector
3.1 AI+ financing
Figure 3 Number of investment events in China
As shown above, the number of investment events continuously increased from 2012 to 2017, although the number dropped a little bit last year. With the development of AI and maturity of the capital market, AI+financial field has received extensive attention.
3.2 AI in the financial industry
This application provides intelligent solutions services through voice recognition, natural language processing and automatic question answering technologies. For example, the online voice customer service would not only save the operation cost of physical branches for banks, but also improve efficiency.
This application simulates human thinking patterns by building models, input and research data, to provide investors with a more reliable investment portfolio that makes risk and expected returns measurable and controllable.
AI helps solve the identity problems during the transaction through face, iris, fingerprint and voice recognitions. In terms of credit analysis and forecasting, specific credit and risk alert models could be designed by AI to better predict and solve problems of customer credit risk.
The first robo-advisor in China was launched in 2016 by China Merchants Bank. So far, the four big Chinese state-owned banks, certain financial institutions and many technology companies all have their own robo-advisors. In the future, advanced AI algorithm platforms together with technology, data and financial institutions would all play very important roles for the development of robo-advisors.
