Despite all the buzz, generative artificial intelligence isn’t going to change banking — but it is poised to change how banking is delivered.
That’s according to Michael Abbott, global head of banking at consulting firm Accenture. Banks that want to harness the potential of generative AI are increasingly focusing on technology to handle time-consuming tasks, freeing up staff time for revenue-generating initiatives like increasing face-to-face time with customers, Abbott said.
Interest in generative AI has soared in the past 18 months, with even the risk-averse and highly regulated banking industry exploring potential applications. Early adopters of genAI can expect to see productivity gains of up to 30% over the next three years. Accenture Report It was published this year.
Banks One of the industries The big Wall Street banks are the ones most affected by technology. Last month, Goldman Sachs introduced genAI into its operations. genAI tool for enterprise-wide code generationIncreased developer efficiency, The Wall Street Journal reported.This month, Morgan Stanley will be introducing a tool called “Debrief” that will keep detailed logs of meetings between wealth advisers and clients and summarize the discussions. CNBC.
Abbott said generative AI is already built into much of the technology banks buy and the vendors they work with, including law firms, employ, and many banks are using genAI for call summary processing in their call centers.
But financial institutions are also exploring other uses for the technology, such as using it to develop scripts for marketing purposes. Abbott said the idea would allow banks to create synthetic identities that could be treated like focus groups and spot red flags in mortgage applications, freeing loan officers to spend more time with customers.
Even more promising, Abbott said, is genAI’s ability to translate legacy code, which could benefit the many banks looking to modernize their older systems.
“Generative AI is impacting every level of banking, but the biggest impact may be actually applying it to the technology itself and acting as a Rosetta Stone, breaking away from 50 years of legacy and taking us into a fully modernized world in a very efficient way,” Abbott told Banking Dive-In. Recent interview.
Editor’s note: This interview has been edited for clarity and brevity.
BANKING DIVE: How are banks of different sizes going about leveraging generative AI?
Michael Abbott: This isn’t just for the big banks. As you get more advanced, if you use this for coding, of course you’ll need your own code. So some of the smaller community banks just buy the functionality. But we’re seeing smaller credit unions using it for marketing and things like that. This is impacting everything from the front end – marketing, conversations, call centers, all the way to the back end.
Much of this technology is cloud-based and democratized, meaning even the smallest banks in the world can leverage it.
Michael Abbott
Used with permission from Accenture
There’s no doubt that generative AI can create efficiencies. But the biggest opportunity is on the revenue side. How do you take the waste out of your processes and systems and put value back in? That’s how the best banks in the world are thinking. The revenue opportunity far outweighs the cost. For example, let’s say you have a loan officer at a commercial bank who’s constantly writing credit memos. If you can automate the writing of those credit memos, that loan officer can talk to more people.
Publicly everyone is talking about productivity, but privately the top banks are talking about revenue, and they want to use this to free up employees’ time so they can focus on revenue generation.
Where do banks still remain cautious or hesitant when it comes to using genAI?
Adoption rates do vary, to be sure. It has nothing to do with size, but more to do with culture. Banks that have a culture of curiosity that is executional — that is, banks that are focused on doing things, not just thinking about things — are thriving in this space. There are many other banks that are more negative and don’t have a culture of curiosity, and they are being held back.
And yet, I don’t know of any banks that offer generative AI to their customers. Augment with generative AI and automate with AI. AI is a very predictive model. AI takes a set of variables and puts it through a process to get an output that you can test, predict, ensure risk and compliance with. Fully explainable to regulators. Generative AI will generate different answers given the same input at different times, depending on what you set as the temperature, the variability you allow. Most banks are augmenting with generative AI and using it to augment human processes. There’s still a human in the loop, but you’re not fully automating and putting it in front of the consumer.
What’s next for you with genAI?
I see banking as a return to the future. Think about what we have to do to get a mortgage, which is now digital. We have to go to a website, enter our information, upload documents, and go through a “process” set up by the bank. 50 years ago, we would have gone to a branch, had someone help us process the mortgage, process it, take care of it.
Now, thanks to generative AI and AI, we can chat with a banker on our mobile phone and start a conversation. We have a virtual conversation and we just upload our documents. No more apps, no more websites, no more journeys to be pushed around. Instead, we just have a conversation and the banker guides us, tells us where we are and what we need to do.
In a strange way, digitalization has made banking functionally correct but emotionally devoid. The big opportunity for technology is to bring the human element back into the experience.
