The way financial services companies are thinking about AI has begun to significantly change. Until relatively recently it was almost a case of, “ok, we have this tool, how can it be used to improve some of the things we do”. Now though, corporates are really starting to embrace the art of the possible when it comes to AI. It’s almost as if a switch has been flicked to acknowledge that, “wow, we can’t even imagine all the things AI can achieve, but let’s start finding out and let’s start building it into the fabric of how we operate”.

And in the case of banks specifically – an industry that has both huge amounts of data as well as the need to evolve its customer proposition – the opportunities for AI to enhance service levels and efficiencies is perhaps greater than in many other sectors. Specifically, by scaling the depth and frequency of personalisation, I believe significant benefits can be realised for both banks and customers. Likewise, AI can help banks unlock far more opportunity from the analysis of its data sets. This in turn, opens up all kinds of possibilities such as rapid personalisation, innovative new product launches and interacting with customers across non-banking channels and platforms.

The potential risks for banks in the adoption of AI are real, and need careful thought on the ways they can be avoided. Concerns range from data privacy and the increased risk of cyberattacks, to the potential for AI to embed bias into credit decisions and the so-called ‘black box’ lack of transparency in some AI applications and inability to understand or explain outputs. 

So, it’s up to banks to make sure that AI is developed in a measured way and that it is used in an ethical and responsible manner. We must get this right. Not only to properly and safely serve our customers, but to protect the reputation of our business.

We want to make sure our customers and our stakeholders are aware of the opportunities and the risks AI brings. For us, it’s important that everyone is comfortable operating within those parameters, based on our transparency, levels of trust we’ve established and the balance of risk versus benefit.

We are continually working to enhance our approach in light of the advancements we’ve seen in the technologies and the upcoming regulations, in the ways we test and measure any new AI systems, taking care to consider the quality of the data being input. This is being done within guidelines and guardrails set out in our AI and Data Ethics approach, which is informed by information available on the impending new laws and regulations.

Part of that strategy is the new AI & Data Ethics Code of Conduct. It outlines two sets of principles: Data Ethics principles, and AI systems principles. We think of these as our ‘north star’ for using AI and data responsibly at the Bank.

The Data Ethics principles are bank-wide and for all colleagues that interact with data. They state that we respect people, their aspirations and their privacy; ensure that our customers can make informed decisions; prevent harm to individuals and benefit society; be fair, accessible and prevent discrimination; and be transparent – communicate to our customers and other stakeholders why we hold data, and what we use it for.

In addition, for colleagues using or developing models which are more complex and data-intensive, we have a set of AI systems principles: AI systems are subject to human oversight, and that they respect and promote human agency; they are technically robust, resilient and safe; that the decisions or predictions produced can be explained; and that they are free from unfair bias or discrimination. 

By harnessing the power of data and AI we believe we can deliver a more personalised, relevant and safer banking experience for our customers. Our chatbot Cora handled c. 11 million retail customers conversations in 2023 alone. AI will further enable us to understand the most important conversations to have with customers, and when to have them. We can then tailor our products and services to meet their needs – whether that’s for buying a home, saving for the future, setting up and growing a business, or simply managing day-to-day finances.

For example, using AI, we identified in 2023, more than 1.4 million customers who were facing significant challenges associated with rising food and fuel costs. As a result, we were able to reach out to a proportion of them with supportive messages. AI also enables us, and our customers, to understand how they’re spending, so we can help them budget, save money and improve their financial resilience – like using the new ‘Insights’ feature on our mobile app.

A key priority is to keep our customers safe and secure. We already use AI to predict patterns and trends in financial crime and fraud and we continue to invest in the latest fraud prevention and detection technology. We’ve got almost 6,000 colleagues and specialists using AI, identifying key trends so we can educate and protect our customers, especially those who are at the greatest risk of falling victim to a crime. We’ve also made AI training available to colleagues.

In much the same way that AI is already embedded in many of our day-to-day lives at home, we’ve been using Al and data to enhance our customers’ experiences and the way we work for years. In fact, around 15% of the Bank’s analytical models already use traditional AI. It’s become synonymous with increased efficiency and productivity.

Through automation and augmentation, we’re being more efficient, freeing up more time to do the things that bring value to our customers. We’re investing in cloud data platforms, machine learning capabilities and data specialist resources to help us to take AI optimisation of our operations to the next level.

By embedding AI across operational processes, we have the opportunity to transform the efficiency of our business, track compliance and accelerate engineering capabilities. AI can also empower colleagues so they are able to work smarter with AI assistance at their fingertips. Ultimately, this will make us more productive and better able to meet the needs of our customers. 

We’re well placed to scale and leverage our investment in cloud technologies and increase engineering skills and capabilities. We have created strong foundations to accelerate the roll out of AI across the bank.

In 2023, we identified more than a 100 use cases across the bank.  We’re now working on implementing several of these use cases in a safe and secure way to improve our customer offering.

And, of course, as already said, we’ll test and measure any new AI systems, carefully considering the quality of the data being input. This will be done within a set of guidelines and guardrails set out in our new AI and data ethics approach, together with any new laws and regulations, as they arrive.

To learn more about the impact of AI on banking, get in touch with your usual bank representative or contact us here. And if you’re attending Sibos 2024 in October, please join us on Stand J11 to learn more about the future of finance.