GenAI in banking: game-changer or world-ender?
Like all new technologies, generative artificial intelligence (gen AI) poses significant opportunities, and its fair share of risks. We outline its potential benefits, and drawbacks, and important considerations for banks seeking to use this fascinating technology in the near future.
AI-powered opportunities await
GenAI has the potential to transform the customer banking experience for the better. From streamlined communications to faster resolution times, there are significant possibilities for improving levels of service.
NatWest, for example, is among that vanguard when it comes to implementing gen AI. The bank’s continually evolving chatbot, Cora, is delivering more responsive services to customers, 24/7, with advanced, game-changing capabilities like voice recognition.
“When it comes to readiness to implement AI technologies, banks have multiple advantages,” says Wendy Redshaw, Chief Digital Innovation Officer, Retail, NatWest Group. “The laser focus on customer benefit alongside data, risk, governance and a highly proactive cadence of releases means that we’re well set to learn quickly and deploy at pace,” she explains.
Banks are especially eager to test new technology in order to improve the services they offer while ensuring they meet the regulatory standards. “Banking firms want to know how to incorporate gen AI into their systems to help simplify compliance and engage in horizon scanning,” says Dr James Bowden, Senior Lecturer, Accounting and Finance, Strathclyde Business School.
Despite widespread enthusiasm among gen AI evangelists, the industry is still some way from fully realising these opportunities. “There are hundreds of gen AI projects going on, but the overwhelming majority are still in the development phase,” explains Bowden.
Why banks must tread careful with gen AI
Despite being an enthusiastic proponent of gen AI, NatWest recognises the limitations of the new technology and is taking a cautious approach. This is especially important as AI applications are advancing rapidly. The hope is that other banks also take this considered approach. Weighing up the risks as well as the opportunities is essential for ensuring the safe and secure implementation of any new technology, especially where concerns around reliability and accuracy exist.
Redshaw believes that considering what gen AI applications are appropriate to be rolled out, and when, makes the best sense. “My expectation is that other banks will follow in our footsteps; however, my hope is that any gen AI roll-out is undertaken cautiously, and with appropriate consideration – not just in terms of appropriateness of use case, and protection of customers or colleagues, but also in terms of the potential environmental impacts of gen AI, with its higher energy requirements,” she explains.
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