Artificial intelligence has been with us since Stanford professor John McCarthy coined the term in 1960. Yet over the last decade, AI has taken quantum leaps in breadth and complexity, and that’s caused leaders in every business sector to consider it with growing interest and concern.
That’s no different for financial services executives, who are intrigued by the potential of artificial intelligence but aren’t necessarily clear on how it would support their strategic priorities. In this, they’re far from alone. When it comes to AI, the learning curve is steep and the technology and its applications seem to change by the day.
In that sense, it’s a good thing I had a front-row seat at one of BAI’s recent executive roundtables, where we had an in-depth discussion of the implications of AI in financial services. Teresa Epperson and her team at A.T. Kearney led the session and one of the main takeaways — which has influenced my point of view — is AI has the potential to create a tipping point between promise and peril.
On the peril side, there exists the danger of misusing artificial intelligence—of AI gone awry because machines will not only outlearn humans, but outsmart them as well. Billionaire Mark Cuban and Tesla founder Elon Musk rank among those who warn of its dangers, with Musk calling AI “our greatest existential threat.”
Yet many counter that AI holds a world of positive potential, including Facebook CEO Mark Zuckerberg, who touts “the amazing amount of good it will do in the world.” And that good encompasses all the visionary goals and day-to-day tasks we can tackle differently — with higher quality, lower expenses, reduced errors and unprecedented speed.
Based on what we have seen at BAI, AI is well on the way to realizing its promise. Astonishing as it might've sounded just a generation ago, one bank now reports that commercial real estate loans of up to $2.7 million can now be approved in less than 45 minutes. Royal Bank of Scotland accomplished this feat in May. We also see AI playing a major role in the sphere of roboadvising, where programs can sift through enormous amounts of data to find prime investment opportunities.
And through robotic process automation, we can hand off clerical tasks to machines that never stop working and clock in at a pace that’s already 20 to 30 times faster than humans. The prospect of RPA hitting critical mass is no longer "if" but "when." Gartner forecasts that RPA software market will grow 41 percent year over year by 2020.
At BAI, we believe that AI’s power will also strengthen our efforts in regulation and compliance — particularly in anticipating fraud as well dealing with and identifying schemes regulated under anti-money laundering laws. At larger organizations where millions of transactions take place, AI can identify patterns that might never be seen by the human eye. AI enables us to identify criminal activity at a much lower cost and faster pace than traditional approaches.
Banks can also benefit like never before when it comes to finding the very best talent in their midst. In the past, banks have built talent databases with predetermined fields—for example, years of experience, types of functional responsibilities held and promotion history. That approach works but has limitations, particularly in larger organizations. That's why AI represents such a monumental sea change. It doesn’t just capture the right data points: It interprets them. The tool enables you to go beyond just extracting names based on the fields you collect; now you can much more effectively identify talent based on the insights AI provides.
When I look at the hundreds of nominations that came in this year for the BAI Global Innovation Awards, I'm convinced AI could become our single greatest change agent in a very long time. It will impact how we do business in many ways, and that includes helping us to attract and serve customers, while creating the seamless, satisfying experiences they want.
And by its nature it will evolve quickly, so we all need to stay on top it. Along the way you may find, as industry leaders have shared with me, that your questions are not so much technical as strategic. Thus I encourage you to think about how to align AI's potential to your business model and strategic goals and partner with experts who understand it.
No matter its might, AI technology remains a tool that waits for us to harness its potential, give it marching orders and put it to best use. Armed with clear expectations and strong strategic planning, we won’t need a computer to tell us that knowing what to do with AI—and in what way—demands intelligence of an entirely different kind.
BAI Beacon has teamed up with Jim Marous and Digital Banking Report on the release of the new report Artificial Intelligence in Banking: The Next Frontier in Customer Experience. Visit Digital Banking Report to learn more.
Debbie Bianucci is the CEO of BAI.
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