Banks eager for Artificial Intelligence, but slow to adopt

Earlier this year we ranked trends in Artificial Intelligence (AI) among the “Top 25 Digital Startup ideas and technologies for 2017.” Artificial Intelligence (AI) has been in Research and Development (R&D) for nearly three decades and computer science researchers are beginning to visualize use cases across industry verticals. The potential for artificial intelligence has been imagined by science fiction writers and Hollywood directors for decades.

The business world is finally getting serious about the disruptive potential of AI. Technologies with thought provoking names like Deep Blue from IBM, DeepMind from Google or Microsoft’s Chatbots are going beyond press-mentions and vaporware to solving real world problems.

Recognizing the significance of the trend, the White House released a report last year highlighting the ways that artificial intelligence will transform our economy over the coming years and decades. (link: Artificial Intelligence, Automation, and the Economy)

However, some analysts are also beginning to wonder if we have reached the “Peak of Inflated Expectations” when it comes to AI.

In a recent article in Forbes, Adelyn Zhou wonders Banks Eager For Artificial Intelligence, But Slow To Adopt,

Yet only a few outliers in the banking sector, such as Capital One, have been able to ship AI products as quickly as their counterparts in Silicon Valley. While many financial institutions have publicly announced ambitious plans to integrate artificial intelligence and machine learning, customers are still waiting months later for these proposed products and services.

So why are banks – who are typically the most capable and tech-intensive players in the business world – acting like Luddites with AI? And how can AI entrepreneurs and developers building products for the industry nail their pitches and drive home deals?

The key points the author highlights are around :

  • Financial Institutions Are Complex Beasts
  • Overcoming The Challenges Of Selling AI To Banks

An article in The Atlantic continues with the theme, stating ‘Artificial Intelligence’ Has Become Meaningless – It’s often just a fancy name for a computer program.

Writing at the MIT Technology Review, the Stanford computer scientist Jerry Kaplan makes a similar argument: AI is a fable “cobbled together from a grab bag of disparate tools and techniques.” The AI research community seems to agree, calling their discipline “fragmented and largely uncoordinated.” Given the incoherence of AI in practice, Kaplan suggests “anthropic computing” as an alternative—programs meant to behave like or interact with human beings. For Kaplan, the mythical nature of AI, including the baggage of its adoption in novels, film, and television, makes the term a bogeyman to abandon more than a future to desire.

Of course, not everyone agrees to the same views. A recent InformationWeek article highlights “How Artificial Intelligence Will Revolutionize Banking”

AI is poised to become a big deal in banking. An Accenture poll of more than 600 bankers reveals that 79% believe AI will revolutionize how banks learn from and interact with customers; 76% believe that AI interfaces will be the primary point of contact between banks and customers within three years; and 71% think AI can be the face of their brand.

AI encompasses three different technologies: Language processing that allows computers to “talk” with humans; machine learning where computers compare new information with existing data to find patterns, similarities and differences; and expert software systems that provide personalized advice. At its best, machines learn from experiences and can interact with humans and behave in ways that mimic the human brain.

Robots and artificial intelligence are already being embraced by banks around the world, both in branches and in back offices. At City Union Bank in the Indian city of Chennai, a robot called Lakshmi tells customers about their account balances and the current interest rates on mortgages. At the Bank of Tokyo Mitsubishi UFJ, a robot called Nao analyzes facial expressions and behavior as it interacts with customers in Japanese, English and Chinese. Lakshmi and Nao are early, visible signs of how banks can use AI to personalize the banking experience.

Ex-Barclays chief says banking could face its own ‘Kodak moment’; urges banks to embrace fintech solutions (link). Former Barclays boss highlights possibility of banks becoming irrelevant if they fail to keep up with pace of fintech expansion. Claims that banks could face ‘Kodak moment’ existential crisis unless they take steps to innovate and transform. Says incoming EU regulations which allow third parties to manage finances of bank customers will create ‘exciting customer experiences’

Do you also think if we have reached the “Peak of Inflated Expectations” when it comes to AI in FinTech?

Leave a Reply