AI-powered banking experiences

“Banks are equally capable of using their extensive knowledge and data about customers to aggregate it in digital channels, but it needs to be made contextual.

Banking has its own success stories, but these tend to come from the disruptors. Take the example of Revolut, which doesn’t believe in branches and invites allows new customers to open an account within minutes via their mobile. Since launching in 2015, it has been particularly successful in acquiring new clients among a highly-educated younger generation, who are attracted by features such as cryptocurrency exchange and peer-to-peer (P2P) payments.

A more sophisticated segmentation method, psychographics, helps banks define them based on their personalities, lifestyles and social classes; thus providing a better understanding.

It takes time, effort and significant investment to make the changes needed, but tech companies are ready to help the banks move away from their legacy systems. If they fail to make that move, Amazon and Google are ready and able to move into their territory.”

What’s Behind JPMorgan Chase’s Big Bet on Artificial Intelligence?

“When America’s biggest bank, JPMorgan Chase, hired Apoorv Saxena in August 2018 as its global head of AI and machine-learning services based in San Mateo, Calif., finance industry watchers saw that as a sign that the bank was making a big bet on artificial intelligence to shape its future strategies. Saxena previously headed product management for cloud-based artificial intelligence solutions at Google. At JPMorgan Chase, he also oversees asset and wealth management artificial intelligence technology.

 According to Saxena, AI will help financial services companies expand banking penetration worldwide, launch new products and deepen customer engagements. AI has helped technology companies and others outside of traditional banking enter financial services, such as with mobile banking and digital money offerings. However, only firms that can earn customer trust, meet regulatory compliance requirements and enhance customer service will make the cut, he notes. Meanwhile, regulations will have to come up to speed with the impact of AI’s advances and help make way for the industry to grow. The U.S. could learn some useful lessons from other countries like China, as it seeks to promote innovation as well as growth at scale, he adds.”

Artificial Intelligence Is Changing Banking and Wall Street. Here’s What to Expect in 2019.

“So, what kind of impact is AI having on banking and Wall Street, and how might the resulting impact on entrepreneurs evolve in 2019?

 Since 2015, we’ve seen the rise of AI-based products designed for the average consumer, like Betterment or Wealthfront. We’ve also seen the inclusion of AI-embedded into products that consumers are already using.

For many years, most jobs in the financial industry were considered irreplaceable by AI due to those jobs’ high-level critical thinking demands and complex nature. But now it’s estimated that 90,000 of the 300,000 current jobs in asset management will disappear by 2025, thanks to AI and automation.

If they then start selling equities en masse, the broader market will take notice, and begin to deepen the selloff. This could lead to a flash crash, or something worse, if not accounted for. And this isn’t hypothetical — flash crashes occurred in May 2010, April 2013, January 2015 and October 2016; smaller crashes have happened even more frequently.

In 2019, we’ll start seeing more banks and credit unions take advantage of this opportunity. Banking consumers, meanwhile, will get more dynamic recommendations for which financial products they should try; and they’ll be exposed to new types of advertising to direct their purchases.”

Goldman Sachs Joins HSBC For $20 Million Bet On Bud’s AI-Powered Bank Accounts

“Some of the world’s biggest banks today joined forces to invest in a London-based startup determined to change our relationship with money.

Bud, cofounded by Ed Maslaveckas and George Dunning, provides open banking technologies to high street players, with a particular focus on AI and “smart accounts.”

Bill switching is another battleground that the CEO mentioned to Forbes last year and which appears to be gaining momentum—Monzo recently announced simplifying bill switching is a feature it’s “exploring,” while auto-switching service Look After My Bills secured a £4 million valuation on the BBC’s Dragon’s Den last year.”

How HSBC Uses AI To Boost Its Digital Banking Immune System

  • “‘You have billions and, in some cases, trillions of transactions across global networks,’ Balkin said. “Finding a needle in a haystack, as it were, is done most effectively using the power of AI to look through massive data sets.”
  • AI-generated fraud alerts that go directly to customers’ smartphones also put them on the front lines of helping their banks fight fraud.
  • “The best person to determine whether there was a [fraudulent activity], for example, on a credit card, is the customer,” he said. “Technology like AI can deliver a superior customer experience and a safer customer experience by putting the power literally in the palm of customers’ hands.”
  • This connection between AI systems and human beings can give banks the tools they need to keep their networks immune from fraudulent activity.”

Capitec sees AI as competitive enabler

  • “We intend to be a world leader in the application of AI to consumer banking. Banks generally, and Capitec specifically, have large quantities of quality data. We protect, manage and govern that data very well and that gives us the best raw materials to start with,’ says Graham Lee, head of data and digital solutions at Capitec Bank.
  • Lee thinks machine learning can benefit Capitec in three key areas. “Firstly, we improve our understanding of clients so we can better tailor solutions for them. Secondly, we can improve our existing models by replacing rules with machine learning to be more flexible in the way we price credit. Thirdly, we can automate manual processes saving employees time that they can spend better helping the client.”

More than 70 Different AI Solutions Currently Deployed in Banks According to New Survey

“A new research report from Mercator Advisory Group titled 70+ Processes Banks Have Already Improved Using AI identifies processes that have been upgraded through the use of artificial intelligence technology. These processes were selected by bank survey respondents from a total of 104 different potential solutions that exist in 13 different business areas, including payments, regulatory, call center, trade desk, IT, and legal. All but one of these 13 business areas had multiple processes that had been upgraded with AI according to the survey responses.

“The breadth with which AI has already been deployed across multiple departments with these banks was a surprise,” comments the author of the report, Tim Sloane, VP, Payments Innovation, and Director, Emerging Technologies Advisory Service at Mercator Advisory Group. ‘However, more surprising was the depth to which AI has penetrated these departments. As an example, regulatory compliance departments reported 13 different business processes where AI is used. The legal department reported 9 different processes. Clearly the large banks are all in on AI and it suggests smaller institutions and their solution providers need to quickly step up their game.'”

Brazil’s Banking Giant Bradesco Plans Artificial Intelligence Leap

    • “The bank, which has a portfolio of over 71 million customers, has been working on a platform dubbed Bradesco Artificial Intelligence (BIA) over the last four years.
    • Currently, 90% of the bank’s services are already available via the app, but sales made via mobile currently represents about 20-30% of the overall business volume. “It’s a low [percentage]. We want to increase sales in that channel,”
    • When it comes to key lessons learned from Bradesco’s AI journey, Minas’s main words of peer advice are around curation: “It is fundamental to have a team that oversees that specific activity, otherwise the results may be catastrophic.”
    • ‘My advice is to assemble a team that focuses on information curation, both from the perspective of what is being fed into the platform and especially what exactly the algorithms are delivering to clients. The technology aspect is really the simplest part.'”

    Robo advice will be ubiquitous

    “Consumers are being inundated with product and service pitches from established financial companies and startups, and choosing the best ones is becoming ever more difficult.

    Increasingly, advice is seen as the feature that can set one offering apart from another. However, tailoring every offering on an individual level poses major challenges. As a result, banks and fintechs see a solution in robo advice, which sprouted in wealth management and has since spread to insurance and now banking.

    For instance, Bank of America, which rolled out a self-directed investment platform called Merrill Edge Guided Investing a year ago, has added automated research to the software. It has also expanded the network of human financial advisers who support clients of its Merrill Edge program, a mashup of robo-advisory and human help. On the robo side, Stock Story provides data and digests of investment analyst reports to help clients research individual companies.

    U.S. Bancorp’s investment arm partnered in July with FutureAdvisor, an investment advisory firm owned by BlackRock, to develop a robo advice product called Automated Investor. Citizens Bank, meanwhile, is in an active development relationship with the fintech SigFig to develop new automated advice tools for banks.

    Personal finance management apps provide data for consumers to ingest. But successfully adding automated advice capabilities through a combination of AI-powered tools and data analysis, with some human support, too, could offer an edge among rivals. Which customer would turn down a helpful suggestion on how to curb spending or save up for a short-term goal?

    Expect to see greater collaboration between banks and firms that provide automated advisory services, and the addition of some level of advice support to nearly every bank offering from savings accounts to lending.”