Financial services need to keep up with the ever-changing technological landscape. We’re talking about artificial intelligence, machine learning, and these fancy Large Language Models (LLMs) like ChatGPT. The possibilities for AI in the financial sector are endless. We’re talking about everything from helping consumers with their financial literacy to using algorithms to mitigate risks behind the scenes. The industry is still figuring out the best ways to use this technology, but a recent survey showed that executives are all about investing in AI and machine learning. They see the potential, and they’re ready to jump on it.
Melissa Cullen, the global head of strategy, product, and commercialization of banking solutions at FIS, knows that financial services have always relied on technology to tackle their biggest challenges. And now, with the pressure to manage costs and grow assets, AI is generating a lot of attention. Whether it’s using machine learning to offer the right services to banking customers or using generative AI to help call center agents answer questions about retirement investments, AI is changing the way financial interactions happen.
But let’s not forget, the financial industry is heavily regulated. So, while there’s a sense of urgency to adopt AI, financial institutions need to be cautious. Joe Robinson, CEO of Hummingbird, reminds us that they have to play by the rules. They need to use explainable algorithms, have auditable decision-making processes, and maybe even involve humans in the loop to ensure that they’re meeting regulatory obligations.
Start small, observe outcomes, and then scale up thoughtfully and pragmatically. That’s the advice Joe gives. And Melissa adds that having the right talent infrastructure is crucial. They need to know where to hire and when to augment. It’s all about adapting to the evolving regulatory landscape.
Now, let’s talk about the potential applications of AI in finance. Consumers want a streamlined experience when it comes to their finances, and companies are responding by focusing on customer experience and automation. But there’s a discrepancy between what consumers want and what financial services companies are delivering. Consumers want one platform to manage all their financial activities, but companies are more interested in adding new tools or improving existing ones.
There are so many ways AI can be utilized. On the consumer side, LLMs can be used to educate consumers, to increase their financial literacy. Imagine having a smart assistant that can help you understand personal finance topics at your own level of knowledge. That’s the power of LLMs. And on the back end, AI can help with things like Know Your Customer compliance or risk mitigation. It can make operations more efficient and help avoid hidden risks.
Melissa also emphasizes the importance of using AI in customer onboarding and ongoing support. But for consumers to trust AI-powered interactions, they need to be useful, accessible, reliable, and personalized. We expect personalized experiences when we’re shopping online, so our expectations for companies handling our life savings are even higher. And let’s not forget the consequences of incorrect data in insurance underwriting or investment advice. Human oversight is necessary to maintain consumer confidence.
So, financial services, it’s time to embrace AI. The possibilities are endless, but caution and human oversight are key. Let’s use this technology to revolutionize the industry while keeping our customers’ trust.