How consumer banking leaders are embracing AI

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Artificial intelligence is becoming a competitive advantage that will force institutions to incorporate it, according to participants at the BankAI conference this week.

"People will have to adopt artificial intelligence,” said Brian Pearce, senior vice president of artificial intelligence at Wells Fargo. “It will have to become part of everyone's set of tools.”

He isn't the only consumer banking executive who sees AI as a major factor in future survival.

“We have to keep up and we have to stay ahead,” said Diane Morais, president of consumer and commercial banking products at Ally Bank.

But if one other thing was also clear at the conference, it was this: The road ahead is not going to be easy. Following is a guide to what banks are doing now and how it may evolve:

What banks are doing

Wells Fargo is piloting several chatbot technologies, though it has yet to suggest a launch date for any of them.

But Pearce propounded an interesting use case for chatbots that hasn’t been discussed before: bereavement assistance bots for bankers.

"Imagine someone close to you has passed away, maybe it's a parent or sibling, and you've been named the executor of their estate," Pearce said. "You're sad, you're grieving, and you now have this messy financial situation to go through. And you're going to call us and you want to talk about handling the deceased person's estate. This is a terrible, terrible use case for a chatbot. You need a human here."

The bank has a team dedicated to bereavement — they take these phone calls and help executors manage the estates of the newly deceased.

"You have a very emotional customer on the phone, and a very complicated set of laws and procedures,” Pearce said. “Unfortunately, the better the customer was, the more complicated it is. With 82 lines of business, you might have a lot of relationships with us — credit card, checking account, mortgage account, savings account, personal loan, car loan and so on."

The bank’s new chatbot will let the customer service representative, who is on the phone being empathetic, ask questions of a knowledge-filled chatbot, like, "In the state of California, what's the procedure for transferring a checking account to an estate?"

Wells is also working on a virtual assistant that will provide financial advice and recommendations to customers. And it plans to use AI to streamline operations, through the use of bots that “do the boring stuff for us,” Pearce said.

Bank of America

Michelle Moore, head of digital banking at Bank of America, shared an update on the virtual assistant it announced a year ago, erica. It's now in use by 300 employees. Sixty percent of the time, employees choose to interact with erica by voice, though they could also use chat, Moore said.

Naming a chatbot is not as easy as it seems, she said — erica was one of the last names the bank considered.

"We were trying to think of one-syllable and two-syllable names, how to make it fast and easy," she said. "We knew we wanted it to tie to our heritage so we were thinking of the name of the founder of Bank of America.” Variations on that name were trademarked.

The bank’s agency put erica, a play on the bank’s name, to music and gave it a personality, and Moore’s team was sold.

It turns out that erica is a girl, after all. The bank has been insisting for the past year that erica was not female. But Moore said, "It's kind of hard not to refer to her as a her versus an it because there is some personality to it. As you saw, when I said thank you, she said, 'my pleasure.' I prefer to refer to her as her."

It seems that erica is being created to be a professional — she’s pleasant, polite and has a profanity filter.

"erica won't be perfect — neither were Siri or Google Home at first — but she will be pretty darned good," Moore said.

Bank of America is using AI in many other areas, too, Moore shared.

“It will strengthen decisions around underwriting, fraud analytics and risk analytics,” she said. “Everything we use data for to make decisions — how do we automate that and turn it into a better experience for customers?”

Ally Bank

Ally Bank was one of the first to launch an AI-based virtual assistant two years ago: Ally Assist, which is based on technology from Personetics.

Ally Assist already provides a contextualized user experience.

"Consumers have the ability to speak or text questions, then based on how they interact with Ally Assist, the content is customized when they come back next time," Morais said. "So if you're always checking your balances, always asking to see what your last five debit card transactions were, that content will be served up for you."

Most people who commonly interact with Ally Assist are heavier transaction customers, Morais said.

"They're checking on their money a lot, they want to know where they stand, they want to be in control," she said.

Ally has also been testing an Alexa Skill for use with Amazon’s Echo devices for a few weeks. It developed a special feature for Alexa called CurrenSee that tells the user how long they'd have to work to afford something they want to buy, like a smartphone.

The bank is also using AI in the back office. For instance, the bank used robotic process automation to streamline an exception process that had required back-office staff to navigate multiple screens and type hundreds of keystrokes. It now takes three clicks.

"The exception process team manager literally cried," Morais said. "The team was so much happier doing things to actually help customers."

To help confront identity theft, the bank partnered with UK company Featurespace, which provides AI-based behavioral analytics.

The startup and the bank created what they call a deposit risk engine.

"We've been able to ingest millions of data records, including transactional information, from our data lake, and put on top of that the tools and self-learning models," Morais said.

Fraud detection rates have gone up and security alerts have dropped, she said.


Robert Sears, executive vice president and global head of product for new digital businesses at BBVA, said the bank is applying AI in credit decisions and focusing on explainability.

"You can't introduce models you can't explain," he said. "Under the U.S. regulators and European regulations like GDPR, you have to explain how a model makes decisions. So as we build out the model, we're building out the tools for interpretability."

The bank also plans to use AI to prevent fraud in account opening and to improve user experience.

How banks see the future

By late summer of next year, the help button in Bank of America's mobile app, as well as its interactive voice response system, will be replaced by erica.

In the future, Moore sees erica working with Alexa, Siri and Google.

At Ally Bank, integration with digital speakers beyond Amazon Echo is in the plan.

"We started with Alexa, and we believe in test, learn, apply," Morais said.

Pearce sees AI transforming mobile banking interfaces.

"That chat interface lets you really rethink navigation and rethink the user experience," he said. "So now, instead of relying on cascading menus or buttons, you could just have a box that says, what do you want to do today? And use machine learning to predict what the customer wants to do."

For instance, if the customer is in a moving vehicle, just had an overdraft fee hit her account and is logging in to mobile banking, "We can predict what you're going to do — you’re coming to check your accounts. So let's use all the data, all the power of prediction we have to simplify the user experience."

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Artificial intelligence Virtual assistants RPA Wells Fargo BBVA Bank of America Ally Bank