The Economic Growth Catalyst: Generative AI in Japan
The rise of generative AI is heralding a new era of economic growth and digital transformation in Japan. According to Kangsoo Kim, Special Research Fellow at the Financial Services Agency, and a Board Director at Matsuo Institute, Japan possesses one of the most favorable environments for AI development.
During his presentation at the Nomura Investment Forum on December 5 in Tokyo, Kim emphasized that advancements in machine processing, data accumulation, and deep learning, alongside the practical application of generative AI, signal a new boom in technology.
Global Examples of Generative AI
OpenAI’s ChatGPT is a prime example of generative AI’s global adoption. Launched in late 2022, it garnered a million users within a week and 100 million within two months. With advances in semantic understanding, ChatGPT underscores the potential of AI across diverse fields, from text processing to programming.
Technological Advances and Investments
As tech giants like Google and Meta ramp up investments in generative AI, the Japanese government’s proactive approach is drawing increased interest. Google plans to integrate its LLM Gemini into its services, while Meta has released open-source software Llama3. Notably, OpenAI established its first Asia Pacific office in Japan.
“The Japanese government’s response to developments in generative AI has been rapid, matching any other nation’s pace in 2023,” noted Kim.
Government Initiatives and AI Strategy Council
A major initiative includes the establishment of the AI Strategy Council to address generative AI’s risks, accelerate digitalization, and enhance productivity. With regulatory support, low labor costs, and substantial potential for digitalization, Japan offers an appealing landscape for tech companies.
Potential Applications in Finance
If generative AI becomes integrated into Japanese financial institutions, it promises to enhance efficiency, automate processes, and reduce costs across various sectors and geographies. Kim mentioned that AI could also fortify defenses against financial crimes by optimizing transaction monitoring.
“As financial transactions digitize, the possibility for AI countermeasures is vast. The efficiency of transaction monitoring could reach unprecedented levels,” said Kim.
The Future of Financial Crime and AI
However, he cautioned that financial criminals are also likely to employ AI, leading to an ongoing cat-and-mouse dynamic as technology evolves. Top corporate leaders must engage with large language models to foster digitalization within their organizations.
To delve deeper into Japan’s financial sector developments, you can view the session replay here (requires client login).
