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IBM in Europe, believes there is a simple solution to the security conundrum. “Our philosophy is we don’t touch the data of the client. The data stays with the client and we bring in artificial intelligence. In many other situations the data gets shared and brought outside of the organisation and that’s when security starts to crop up.”
IBM’s approach to AI, what it describes as ‘cognitive computing’ is that it’s an essential tool for data management of the future. Using AI to transform traditional banking functions means using machine learning and applying analytics to data to understand more about the enterprise, customers and competitors.
“Banks are going to compete on data, not process,” says van Engelshoven. “Yes, they have to be effective at processing but that’s not where they will compete ultimately. They’ll compete on insights. Providing these insights will not only come from AI (that’s also impossible) but it’ll come from people working with AI, working with data and advising their clients on what they see.”
Another hurdle to be overcome by the banks looking to leverage the benefits of AI or robotics is compatibility with the current IT infrastructure. This is also a challenge for startups and other vendors hoping to sell their wares to the financial services market: how can they make deployment as simple as possible? “One of the biggest challenges in banking and even in insurance is always legacy systems. Many of these databases and systems have been installed many, many years back and if you look at what systems are being used they’re often very, very outdated,” says Jain.
But Enterprise Bots has found a solution, he claims. “In these cases we put a robotics layer on top so we can integrate with these systems. It increases the time and the cost but that is one of the most significant challenges there is as we move ahead in this process of automation.” The company’s chatbots can be rolled out to a pilot user base of 5,000 to 10,000 users in three to four months for three months of testing, before being ready to roll it out to the general public. “Banks do tend to always have more stakeholders, more points of view, so it varies between seven months to 12 months.”
If the use of AI is to become ubiquitous in banking (the Accenture study found four out of five respondents believe that AI will revolutionise the way banks gather information and interact with customers) the effects will be felt far beyond the IT department. As an increasing number of functions are automated, jobs will be impacted. Research by Cognizant found that among vertical industries, banks will see the highest levels of staff reduction: 28% of decision makers in financial services and banking anticipate a reduction in headcount in the next three to five years as a direct result of automation.
McIntyre says that while some jobs may well be carried out by robots in the future there is no cause for alarm. Indeed, it’s a natural consequence of the evolution of work and job roles, he claims. “Ten years ago there was no job for someone to develop banking apps for the iPhone. Yet now when you look at the leading banks around the world mobile banking is an enormous part of their business and they have huge teams dedicated to managing that customer experience. We see a lot of our clients looking at moving people around within the organisation retraining people and thinking about different roles. On aggregate we think the technology will create jobs as well as replace jobs.”
Examples of AI in practice in UK banks are thin on the ground as many are still in “stealth mode,” as Jain points out. But further afield there are high profile examples of AI working well. Swedbank, one of Sweden’s largest retail banks, is using ‘Nina’, a virtual assistant platform, to help it solve customer queries. The statistics around customer adoption are compelling: 30,000 conversations occurred per month within the first three months of the deployment. Nina is now reportedly answering eight out of 10 customer questions.
The rise of the virtual assistant is going to continue unabated here in the UK, claims McIntyre. “I don’t think it’s unrealistic that in three years’ time a lot of the interaction that we’ll have in our home or with our phones is going to be through natural language interfaces, whether it be typing into a text box or talking to a device.”
www.ibsintelligence.com © IBS Intelligence 2017
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