Revolutionising banking: The role of AI in shaping the future

Artificial intelligence is a crucial driver of innovation and financial inclusion. It can help banks offer better services, reduce risks, and increase efficiency. While banks have used AI for various purposes, such as risk management, operational efficiency and client engagement, emergent Generative AI has the potential to disrupt the banking industry and give traditional banks an edge over their fintech competitors.

First, Generative AI can help banks design new products and services tailored to their customers’ needs and preferences. It can also help banks generate new insights and strategies from data and information. Moreover, generative AI can help banks create new content and communication channels that are engaging and persuasive. It can also help banks provide personalized recommendations and advice to their customers based on their needs and goals.

Bill Yeboah Kyeremeh, General Manager, Delivery and Innovations, Consolidated Bank Ghana, says the bank has leveraged generative AI internally on its intranet to create a “cheat sheet” where teams can easily access any information or policy with an advanced tool that immediately directs users to the right place. The bank has also created a chatbot that is being plugged into its digital channels to help engage customers better. “AI makes far fewer mistakes than humans and enables continuity in the event of staff changes,” he adds.

Consolidated Bank is the second largest bank in Ghana, with vast volumes of data. Using analytics and machine learning, the bank can apply predictive analysis of previous customer actions to provide them with customized solutions proactively, says Kyeremeh. “I see greater AI use in the next few years in our environment, helping us to do even better because custom banking is all about service. It helps deliver a superior customer experience, which attracts new customers. A bank’s role is no longer about meeting customer needs; it is about exciting the customer,” he adds.

Neobanking is a new concept that has emerged in the digital era. It leverages AI to offer convenient, secure, efficient, and affordable banking services without physical branches, which can be a significant barrier to entry in many countries. Neobanking can also provide financial education and literacy to people who lack access to traditional banking services.

Farshad Nowshadi, VP of eStrategy, Saman Bank, UK, says, “AI drives Neobanking by making banking more easily accessible, personalized, secure, efficient, and affordable, enabling convenient banking. The underlying AI helps neobanks analyse customer data to deliver customized recommendations, detect and mitigate fraud, automate banking procedures, and reduce costs. These significant cost savings are passed on to customers.”

Saman Bank is leveraging AI’s power to provide better user experiences and personalized financial solutions, says Nowshadi. The bank has developed a virtual assistant called Saman Bot that can provide financial advice and answer customer queries around the clock. The company also uses AI to prevent fraud by detecting and flagging suspicious transactions for human review. This system has saved millions in fraud losses for the bank. Further, Saman Bank uses AI to assess the risk of lending to different customers, enabling it to make smarter loan decisions.

“As AI continues developing, we expect to see even more innovation. The successful bank of the future will be the one that can best utilize the AI algorithms, working on relevant, up-to-date and accurate data sets,” Nowshadi added.

Prag Sharma, Global Chief of AI, Citibank, says Generative AI represents unprecedented progress in our quest to create machines like us. “Its all-encompassing capabilities will eventually support us in many aspects of our lives. We will live surrounded by many more AI-capable machines in the future.”

Its impact goes beyond the banking sector, Sharma says. “AI can make business, government, and society more inclusive, responsible, and human-centred. The first step towards this goal is for all of us to understand the capabilities of this technology, its weaknesses and its strengths. And it’s not just the technologists/ data scientists that need to understand this; it is also the business leads, thought-leaders and end users,” he adds.

AI safety guardrails

However, generative AI also poses risks and challenges for the banking sector. For instance, generative AI can create fake or misleading content that can harm the reputation or credibility of banks or their customers. It can also be used to bypass security or compliance measures that are in place to protect the integrity and safety of the banking system.

Sharma calls for guidelines to protect the public from the harmful effects of AI. “I think of AI as a double-edged sword; numerous applications/ use cases can be exploited today to benefit society. That said, banks and regulators should ensure we have the appropriate guardrails when we utilise this technology, especially for high-risk applications.”

Nowshadi of Saman Bank warns that there is a danger that no one will be accountable for AI in the future. “AI can potentially revolutionize the banking sector, but there are risks associated with relying too much on this technology. Some risks include data bias, algorithmic opacity, job losses, cybersecurity risks, customer dissatisfaction, and data privacy concerns.”

“It is essential to weigh the risks and benefits of AI before relying too heavily on this technology. Banks should carefully consider the potential impact of AI on their customers, employees, and cybersecurity before making any significant decisions,” he adds.

Kyeremeh highlights the ethical implications of unrestricted use of customer data. “The challenge is balancing the use of customer data to improve their experience, but also ensuring their privacy.”

To guard against these concerns, Consolidated Bank ensures that data residency regulations are respected while ensuring that the customer is informed how their data is being used so that they know what rights they are signing off, says Kyeremeh.

The spectre of job losses hangs over the banking industry as AI advances. Several banking-related jobs, such as customer service, risk assessment, compliance, investment banking, and marketing, could be significantly affected by AI. “Banks must be prepared for this change and invest in new technologies and skills to remain competitive,” Nowshadi says.

Kyeremeh says some of the fears related to AI can be solved with effective communication. “We communicated to our employees that AI is here to improve their jobs and provide opportunities for them to learn new things and use their time more productively.”

Kyeremeh, Nowshadi and Sharma will be speaking at Gitex Global.

Kyeremeh welcomes the opportunity presented by Gitex Global to learn new things and network with peers. “Every situation presents itself an opportunity to learn, and you can only improve yourself by mingling with people with similar views. And then you can pick up new ideas. So, it’s all about learning new things and networking,” he adds.

Nowshadi will share his knowledge and expertise on the future of banking, distributed finance and smart wallets at Gitex Global, which are all powered by AI. “We all need to wake up and appreciate that the wave of changes coming our way will mean that we will see radical changes in what we have taken for granted in today’s financial world.”

Sharma says Gitex Global is an unparalleled stage to discuss and debate the most pressing issues of our times as they relate to AI with experts from across the globe. More importantly, it allows for learning and growth, he says.

AI, particularly Generative AI, is reshaping the banking industry by enhancing services, improving efficiency, and personalizing customer experiences. While it holds the potential for immense benefits, banks must also navigate the risks and ethical considerations associated with AI adoption. As AI continues to evolve, staying informed and adapting to changes will be crucial for banks aiming to thrive in the AI-driven future of banking. Gitex Global provides a platform for experts to share knowledge, learn, and network, contributing to the ongoing transformation of the banking sector.

• Business