Citizens' AI drive hits a wall — commercial loan processing

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Banks are actively looking for ways to incorporate artificial intelligence and machine learning, but Citizens Financial Group in Providence, R.I., hasn't found a comprehensive solution for processing commercial loans.

Scottie Venable, the $161 billion-asset company's commercial loan operations director, told an audience at the Finastra Universe conference this week that his unit has begun using some AI tools to serve customers. But document processing and loan analysis, he acknowledged, remain difficult to automate.

“Commercial loans by nature are much more complex,” Venable said.

The panel highlighted the sometimes imperfect transition awaiting banks that want to digitize their back-end processes and simplify the most monotonous banking tasks.

“In the three years I’ve been in this position, I’ve had my operations team engaging more with customers directly,” instead of focusing on menial tasks, Venable said.

That change occurred in part because the division is using virtual assistants, which are a simpler form of automation, for responsive process management. Venable said he uses as many as 14 bots for emails and other various tasks. “They’ve been critical in saving us time and effort,” he said. “We can’t implement them fast enough.”

But Venable added there are still gaps he wants to address.

He discussed how his team still manually enters data in Citizens’ system, as many as three or four times for the same document.

Venable said he is in discussions with fintechs about helping Citizens improve the way it inputs and manages data, which is more of a problem for banks now than it has ever been given the amount of data they gather and process daily.

“It’s kind of a new frontier for us,” Venable said. “We’re excited about what’s out there, but we’re just scratching the surface in the commercial space.”

Citizens is “nowhere near” where it wants to be as far as using AI for loan documents, he said.

“When the AI concept is talked about, I think about pulling information out of our loan documents," he said. “We still deal with a lot of paper.”

Venable’s digitization efforts, done hand in hand with fintechs, show how attitudes about opening up internal systems to third parties have shifted over the years.

Open banking concepts are expected to increase those partnerships, but chief information officers and other executives remain leery about such relationships.

“When a fintech knocks on a bank’s door, the CIO gets a heart attack,” Martin Häring, Finastra’s chief marketing officer, said during a panel about open banking. “The CIO thinks it’s hard to share data with a fintech.”

Open banking has been slow to gain widespread momentum in the U.S., partly because banks fear they have something to lose with more intimate fintech partnerships. They are troubled by fintechs’ ability to gain access to critical customer information that can be used to make more alluring products.

While regulation in Europe has forced banks there to embrace open banking, the U.S. still lags in this area despite efforts from BBVA Compass and others.

Häring urged conference attendees to embrace open banking concepts as a way to treat their institutions more as a platform for fintech to build upon.

The panel referenced Green Dot as an institution on the right path.

The digital banking and payments provider has an enterprise banking-as-a-service platform that companies including Intuit, Stash, Uber and Walmart are using.

“Things are happening in the U.S.,” said Alan McIntyre, the global banking industry leader at Accenture. “Green Dot is a classic open banking use case. Through its partnership with Uber, it’s become the largest originator of business banking accounts.”

For now, banks appear content with fintech arrangements that address certain areas such as AI and machine learning.

“A lot of our clients are looking into AI to improve operations,” said Gary Huang, a director at Accenture. “They’re looking to improve the customer experience, and that’s key.”

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Machine learning Artificial intelligence Commercial lending Commercial banking Fintech APIs CIO Citizens Bank Green Dot