• Malcolm DeMayo, Vice President, Financial Services at NVIDIA


• 18.04.2023 07:15 am
undisclosed

With high inflation and rising interest rates, the current macroeconomic situation remains uncertain for all, but banks in particular are enduring a rocky road. Amid the challenges, results from NVIDIA’s recent AI in Financial Services Survey show there’s strong evidence that artificial intelligence (AI) technology is helping financial institutions weather the storm - managing risk, optimizing operations to reduce costs, and meeting the needs of clients and customers.

As a result, and in a time of unprecedented interest in AI fueled by the recent sensation of generative AI, executive support for AI in banking is reaching new heights. Findings from the survey reveal that the way banks use AI is evolving, and those that adopt the technology are gaining market share.

Get the best of both clouds

Increasingly, the survey shows, banks are moving to a hybrid cloud strategy to optimize spending for AI training and inference. Banks value the OpEx classification of monthly cloud expenses, but recognize that specific workloads are cheaper to train on-premises, and the sensitive data used by banks may not be migrated to the cloud. 

An emerging solution to this dilemma is a hybrid cloud strategy, which allows institutions to manage their compute-intensive workloads while protecting sensitive information on-premises, all in a cost-effective way. 

Almost half of the financial services firms surveyed indicated their move to a hybrid cloud strategy, and cloud service providers have taken note, adopting full-stack accelerated computing solutions to the cloud and making it easier to standardize software across multi-cloud and on-prem instances. 

LLM in FSI

The tech behind the sensation of generative AI is being adopted by firms to create personalized customer experiences, improve fraud detection and reinvent the way business is done.

Survey respondents reported that top AI use cases for their financial services firms include natural language processing and large language models (26%), recommender systems and next-best-action (23%), portfolio optimization (23%) and fraud detection (22%).

Natural language processing and large language models are the engine of generative AI, and banks are increasingly taking advantage of them to enhance operations. For example, Germany-based Deutsche Bank is testing out large language models that will have the potential to detect fraud, providing early warning signs of counterparty risk, retrieving data faster and identifying data quality issues.

Generative AI is also a powerful tool for creating custom digital avatars or personal assistants. The technology can be leveraged to build and deploy intelligent virtual assistants and digital humans at scale. For banks, avatars or digital assistants can detect customer preferences, make personalized recommendations, and engage with customers in real time regarding all their account questions in a more personable manner. The avatar or digital assistant can be adjusted to match the bank’s culture and philosophy for maximum branding continuity.

Cutting costs, not corners

Also uncovered in the survey was how industry professionals are leveraging the power of AI for increasing revenue and decreasing costs. Almost half of survey respondents said that AI will help increase annual revenue for their organization by at least 10%. Over a third reported that AI will also help decrease annual costs by at least 10%. In today’s economy, these numbers hold more weight than ever. 

More specifically, banks are seeing these improvements across customer experience, operational efficiencies and reduced total cost of ownership. On the customer experience front, banks are using AI to stop fraud in its tracks by augmenting anti-money laundering and know-your-customer processes. They’re also using recommenders to fashion personalized digital experiences for customers or clients.

To enhance operational efficiency, banks are using AI components like computer vision and natural language processing to automate document analysis and claims processing, ultimately saving valuable time, money and resources.

AI service with a smile

The potential for AI to improve the customer experience for banks goes beyond avatars and digital assistants. The technology is transforming customer experiences in many avenues, streamlining the process for maximum satisfaction.

For example, Speech AI technology is a powerful tool for boosting customer satisfaction. Automatic speech recognition and text-to-speech capabilities enable banks to answer customer questions faster and more accurately. Speech AI tech in banking can sometimes get a bad rep from dull, robot-like voice assistants that often misunderstand customer requests, but new-age, state-of-the-art speech AI tech is revolutionized with high levels of accuracy, boosting customer confidence and loyalty.

Ret-AI-ning talent

Interest in all the efficiencies AI can bring banks is at an all-time high, but there’s something in the way of seizing it. Recruiting and retaining AI experts to drive these innovations continues to be a top barrier to AI success for firms.

Survey results indicated that 36% of respondents list obtaining AI talent as an obstacle. Data scientists are at the heart of any AI initiative, as they process and analyze data and build AI models, and banks need strong teams of them to realize their goals. 

Additionally, 28% of survey respondents reported not having enough technology to accelerate AI innovation at their firms, and 26% said they have insufficient data sizes for model training and accuracy. Greater investment into the infrastructure and talent supporting AI initiatives is needed to unlock its value. 

AI promises to transform the financial services industry for providers and their clients. But companies need to do more to compete effectively with incumbents, fintechs, big tech, retailers, and others that want more than their fair share of financial services customers and their financial data.

From higher revenues to more personalized, rewarding customer interactions, AI is opening numerous doors of opportunity and building a strong competitive edge for banks in a highly competitive industry.