Slideshow Opportunity or threat? How AI will change banking

  • May 15 2018, 10:00pm EDT
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The state of AI in banking

When you publish an estimate of how a technology will affect an industry — say, that 1.2 million jobs will be lost in banking due to adoption of artificial intelligence software — you get a variety of pointed reactions.

Some will say the number is too high and that AI is an overhyped buzzword like Big Data was a few years ago — soon to be discarded for the Next Big Thing. Others will argue that 1.2 million seems like too small a number. Some insist that AI will only do boring, repetitive tasks, leaving the really interesting stuff for humans. Yet others say that's nonsense, that AI can handle complex, creative or emotional work as well if not better than people can.

Bankers themselves, when surveyed, express contradictory views about AI. They like it, and think it will have a big impact, but so far they are not investing significantly in retraining employees to use it.

No one really knows exactly how much disruption and dislocation AI will cause. But it does seem safe to say that financial companies that find smart uses for AI will have an edge over their peers.

What follows is intel about the attitudes of bank executives and employees toward AI, and where the technology is already making inroads.

Bank executives are enthused about AI

Executives say AI will transform their companies and create more jobs. A common refrain among bankers is that AI will remove “grunt work” and free human beings to do more interesting tasks.

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Analysts predict bank jobs will be eliminated by AI

Teller jobs will be hardest hit by the advent of AI, according to researchers at Autonomous. These jobs are already disappearing thanks to the rise in mobile banking and the shutting down of branches. Compliance officers, called "middle-office" workers in this survey because they straddle the outside and back-office worlds, and loan officers, who are included in the back-office category, are among the other job types at risk.

Executives doubt workers are ready for AI

Bank leaders say their workers are not ready to work with AI. But somewhat counterintuitively, few are planning to invest in helping employees obtain the needed skills.

Employees lack confidence about working with AI

Echoing their bosses, only 40% of surveyed bank employees say they are very confident in their skills and abilities to work with intelligent technologies. Millennials are the most upbeat, but even in that age group only 47% say they are very confident.

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Bank employees want to master the game

Still, employees hope AI will bring opportunities for them and think it will make their jobs more interesting. They’re also keen to gain the needed skills to use AI.

The AI tech that's eliminating jobs

Regardless of how anyone feels about it, AI is already starting to do some of the work of humans in financial services. Chatbots and virtual assistants (such as Bank of America's erica) will do some customer service work. AI-based fraud and regtech software is doing security and compliance tasks (at BBVA, for instance). And it's helping make loan decisions, at Ford Motor Credit, for example.