Highly regulated, customer-centric, and dependent on layers of human involvement and manual processes, financial services are ripe for automation through artificial intelligence (AI). Those same characteristics, however, reveal the risks AI pose to this sector. So business technology leaders in financial services are carefully navigating a path toward AI. But as they reveal, it’s a route they must navigate with caution.
AI dominates discourse and headlines, but financial services technology leaders know there’s a lot of substance amid the noise. “There are many tools that go into a hype cycle, and then you come out of that cycle a little dismayed, but there’s a difference here,” says Dominic Cugini, chief transformation officer at KeyBank. “We’re seeing how fast this technology is maturing, so it’ll have a very different hype cycle.”
AI is not the future of financial services — it’s the present. Genpact, a major business and technology services company that assists banks such as JP Morgan and Goldman Sachs, is already utilizing AI. “It’s really good at summarising, filling in blanks, and connecting dots, so generative AI is fit for purpose,” says Brian Baral, global head of risk at Genpact. “We’ve been able to leapfrog and do in months what had taken three years, but the data is key. Banks have to get ready to take the step forward.”
Conscious of the recent history of disruption to financial services, the sector’s technology leaders are already looking for opportunities in AI. “Generative AI is starting off a new age of exploration in IT,” says Frank Schmidt, CTO at insurance firm Gen Re. Cugini at KeyBank agrees, and adds that the exploration has to include a cross-functional team from all areas of the business, not just IT. “We also pulled in some experts from Microsoft and Google to really understand what AI means to our sector.” Schmidt sees AI as having potential in process automation, particularly underwriting submissions. “AI will play a role in this workflow and classifying information,” he says.
CIO Tiago Azevedo of Boston-based low-code development platform OutSystems agrees. “In order to get meaningful productivity from AI, we need to rethink workflows,” he says. “And I expect AI will become composable so it can play different roles in the organization.” For this to succeed, financial services organizations will need processes that are far more modular.
Just as the adoption of AI needs all parts of the business to be involved, so too does the ethical mandate of financial services organizations and their use of generative AI. “We’ve started an ethical AI committee that consists of the legal, compliance, technology, and cybersecurity teams,” says Cugini.