Bankers embrace new guidelines for ethical AI

  • “‘We are still in early stages,’ said Malcolm Griggs, the chief risk officer of Citizens Financial in Providence, R.I. ‘The work we have done on machine learning, data science and automated processes as tools to help customers and streamline decisions is tested to guard against unconscious bias that would result in unfair treatment or inappropriate use of data.’
  • Tony Cyriac, BMO Financial Group’s chief data and analytics officer, said BMO ‘is working towards accelerated business outcomes using AI while preserving the trust with our customers and internal stakeholders with our Trustworthy AI initiative,’
  • U.S. Bancorp in Minneapolis is currently using AI in numerous applications including fraud detection, customer service improvements, directing calls to the best person, process automation and forecasting, according to Tanushree Luke, senior vice president and head of artificial intelligence in the bank’s chief digital office. In the future it expects to expand its use of AI in customer services, cybersecurity and explainability, he said.”

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.”