The Promise of Artificial Intelligence in the Banking Industry

Artificial intelligence is everywhere. From business innovations and media headlines to TV and movies. In the financial services industry it’s still in its early stages however the organizations are slowly catching up. Banks are navigating how they can build and implement AI that capitalizes on the skill sets available and addresses the highest-priority challenges and opportunities for the industry. The added bonus – it’s expected to save companies big bucks.

Where AI is Creeping in

Some large financial institutions, including commercial banks, insurance and wealth management companies, have started using AI or partnered with AI startups. Erica, Bank of America’s AI powered virtual assistant, uses voice commands and texting to help customers with basic tasks like looking up account information or transferring money.

It’s not just about customer facing technology. AI is being tested for middle and back office tasks too. By using machine learning to analyze big data sets, AI is helping companies:

  • Monitor for online fraudulent activities in real-time
  • Make faster and more informed lending decisions on customer loans
  • Reduce the time is takes to complete compliance and regulatory tasks

Key Considerations for Implementing AI

Just as with any big operational change, AI needs a careful implementation plan to be truly effective. As banks and credit unions adopt this powerful technology, there are 4 steps to consider.

  1. Build a fast, secure digital backbone

To function correctly and deliver value, AI needs access to large amounts of quality data that it can collect, analyze, and make decisions upon. The data needs a highly secure, low latency connection to quickly travel from point of capture to point of analysis and then back again.

To achieve this a cloud infrastructure is recommended. Having a strong digital backbone and appropriate infrastructure in place will help financial institutions future-proof their AI technology investments.

  1. Re-skill the workforce for AI

In the near future, employees and AI will work together to solve problems. While some current jobs will be taken over by AI, more jobs will be created for AI and employee collaboration. Workforces should adapt to this by re-skilling talent and reorganizing teams.

According to Accenture, banking executives say only 1 in 4 employees are ready to work with intelligent technologies. Companies can start by planning how they will use AI, researching the skills needed to work with the technology and building an employee training plan.

  1. Follow privacy and security requirements

Respecting the privacy of customer data while maintaining high security standards is critical. AI uses a large amount of customer data to ‘learn’ and perform tasks. This can make tracing its progress and how it uses customer data complex.

Plus, laws such as the General Data Protection Regulation (GDPR) and Payment Services Directive (PSD2) require companies to be more transparent with customer data.

These emerging factors combined with the highly regulated finance industry means extra care is needed when adopting AI. It’s also vital to regularly update governance policies to help reduce and control any potential risks.

  1. Stay connected with customers

From predicting future issues to personalizing recommendations, AI is helping to improve customer services. Additionally, AI is being used to resolve simple issues quickly and efficiently. This frees up customer service representatives to help with more complicated questions or tasks.

It is important to balance using AI with human employees. Although AI can ‘learn’ like humans, it still lacks emotional intelligence and empathy. To make sure businesses are staying in touch with customers there should be regular touchpoints and customer service surveys to ensure the AI is providing a benefit, not a hindrance.

The Staying Power of AI

AI will play an increasingly important role within the banking industry as the rewards outweigh the risks. It presents the potential to help financial services organizations save time and money by becoming more efficient. This presents the opportunity to provide more personalized, omnichannel services for their customers and members.

To succeed, financial services organizations need a fast and secure digital backbone to manage the data and computing needs of AI. It is important to complement this with re-skilling the workforce to fully understand its benefits. Finally, no business should lose sight of ensuring the right security measures are in place, privacy and compliance standards are adhered to, and the human factor is never entirely lost. By remembering these factors and developing a thorough implementation plan, the financial services industry can help humans and AI work together harmoniously.


Author's Bio

John  Vladimir Slamecka

John Vladimir Slamecka

AT&T Region President for Europe, the Middle East and Africa
John Vladimir Slamecka leads the Global Account Solutions-EMEA team for AT&T as region president. John joined AT&T in 1986, serving strategic and executive leadership roles in marketing, asset protection, sales, product and finance in Europe and Latin America. He is an experienced global leader with an extensive background of successfully managing global teams. Under Mr. Slamecka’s direction, multinational companies have access to a single, globally available network to run all of their critical applications, such as voice communications, enterprise resource planning, unified communications and video collaboration. Previously, Mr Slamecka led AT&T’s worldwide carrier relationships outside of the US, providing wholesale voice and data services and access solutions for local carriers. Prior to this position, in 2007, Mr. Slamecka was responsible for the strategic direction and tactical management of AT&T’s global resources as regional vice president for AT&T’s EMEA and Canada / Latin America regions. From 1995 to 1999 Mr. Slamecka led the enterprise operations for Lucent Technologies. Located in Vienna, Austria, he served the company’s Central and Eastern Europe business; and then, located in Miami, Florida, the company’s Latin American business. During this period, he also held the position of managing director for Lucent’s organizations in the Czech Republic, Slovakia, and Italy. In 2001, Mr. Slamecka founded and served as chief executive officer at Klarium SARL and was a director of March Networks Corporation from February 1, 2010 until its sale to Infinova in June of 2012. Mr. Slamecka is a native of Washington, D.C. USA and has resided in London since 2006.