08 Jan Preparing for My Panel on Artificial Intelligence at STAC 2018
I am moderating a panel at the Securities Traders Association of Chicago’s Mid-Winter Meeting that will look at Artificial Intelligence (AI) and how it’s impacting future traders and analysts. In preparation for the discussion, I found interesting statistics about the ways banks are leveraging AI. According to a study done by BAI, titled Artificial Intelligence in Banking, less than 20% of financial institutions have implemented one or more AI solutions. However, the study also predicts that this number will grow in 2018 as financial institutions look to third parties and FinTech companies for help in this realm.
The BAI study mentions the ways that large financial institutions such as Bank of America, Wells Fargo and the Royal Bank of Scotland are leveraging AI. It seems that these banks are looking to enhance the customer experience as well as automate certain tasks with AI solutions. For example, Bank of America announced in Spring 2016 a virtual assistant called Erica that will operate within the bank’s mobile app. Erica uses AI, predictive analytics as well as cognitive messaging to help customers make payments, check balances, save money and pay down debt.
Wells Fargo is also using a chatbot to help customers make financial decisions. Through Facebook Messenger, the bank launched the chatbot to gauge whether artificial intelligence is a viable way to interact with customers and make banking more convenient. With 5000 customers and team members using the bot as of July 2017, users can ask questions about account balances, recent transactions and ATM locations as well as inquiries such as how much money the user spent on food last week.
Finally, the BAI study points out that the Royal Bank of Scotland (RBS) is also leveraging AI to automate the approval of commercial real estate loans. This would reduce days of work down to a 45 minute process. Also, in May of 2017, RBS announced that LivePerson, a provider of cloud mobile and online business messaging solutions, had rolled out a “hybrid bot” at the bank. The platform serves as the foundation for RBS’ digital communications strategy and integrates other AI solutions to help intelligently answer FAQs.
As Artificial Intelligence becomes more mainstream in the financial industry, I thought the most interesting part of the BAI article was the tips provided for how financial institutions should address the concept. Many banks seem to be using AI solutions to enhance the customer experience and it’s important to remember that an infinite amount of opportunities lie in customer data. According to BAI, millennial investors are willing to share more personal information in exchange for a customized approach to banking. Also, by automating simple tasks banks can use that savings to make room for an innovation budget and expand their AI initiatives. Finally, the article suggests that firms form a special team to research, build and drive AI programs.
While it seems financial institutions are still seeing how AI initiatives will play out, and I will know more after my panel discussion, BAI makes a very important point. The longer a firm waits to get on the AI train, the longer it will take to catch up!