‘Transformational’: Why bank bosses can’t resist the AI craze

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The artificial intelligence craze appears to be irresistible to the bosses of our big banks.

Not only does this much-hyped technology hold the promise of cutting costs, bankers are also working on how it could be deployed in ways that would enable banks to embed themselves more deeply in customers’ financial lives.

CBA chief Matt Comyn says the latest technology could be “quite transformational”.Credit: AFR

So, it makes sense that Commonwealth Bank chief executive Matt Comyn, National Australia Bank’s Ross McEwan and Westpac’s Peter King were all keen to get a close-up look at the latest AI trends when they attended a Microsoft CEO conference on AI in Seattle this month.

Yet, for all the hype about AI and its potential to transform business, this technology clearly brings plenty of business risks, while also raising real concerns for employment in the wider corporate sector.

These costs and benefits of AI – and the likelihood that governments may need to step in and regulate the fast-growing sector – were on display at a CBA technology briefing on Wednesday. Wherever you stand on AI technology, it is clearly an area that big businesses can’t afford to ignore.

So, what’s got the bankers so excited?

Wherever you stand on AI technology, it is clearly an area that big businesses can’t afford to ignore.

CBA, regarded as the technology leader of the big four, has been using some form of artificial intelligence for years, but it claims recent advances will drive “dramatic” improvements in how it can deal with customers.

First, it is betting that AI can help it deliver more “personalised” service through its app, thereby helping it extend its dominance in retail banking.

The bank already uses AI to sift through millions of data points to bowl up financial tips or reminders to customers. But as the technology becomes more advanced, it wants to make these interactions more personalised, in the hope that makes people more loyal as bank customers. It is far from alone in this fight: CBA’s rivals have also invested heavily in systems that can sift through reams of data and with the goal helping people better manage their money.

Second, CBA showed how an AI “chatbot” could be used to help call centre staff find answers to complex questions more quickly, rather than trawling through the bank’s voluminous policy documents. The bank presented this as a way to improve back-office efficiency, but these are the sorts of changes that raise obvious questions about robots taking white-collar jobs.

When asked directly about the risk of AI bots eventually replacing staff, Comyn emphasised the bank’s focus was on customer service. But he did not shy away from the possibility there could be big changes on the horizon, either.

“We are primarily oriented around how we can serve our customers, protect from scams, fraud, but I do think the technology that we’ve seen over the last six to nine months has the potential to be quite transformational,” Comyn said.

CBA employs about 7000 engineers who write code, and Comyn said there was now software that generated code, which gave the bank some “enormous opportunities” to improve.

One of the biggest fears for NAB chief Ross McEwan is AI being used to do the wrong thing with customer data. Credit: Bloomberg

NAB’s McEwan also highlighted the potential efficiency gains from AI last week, saying technology could save staff time by documenting their conversations with customers, for example.

But against the potential gains in productivity, there are clearly risks to banks and big business from AI, too.

McEwan last week said his big fear was AI being used to do “the wrong thing” with customer data, while Comyn also raised concerns, including how technology could be able to mimic peoples’ voices.

Given such risks, Comyn said some form of regulation was inevitable and desirable. “I think governments and regulators around the world are thinking about what does this mean? What are the risks, what are the opportunities?” Comyn said.

What about the risk that AI becomes so proficient at replacing human workers that it becomes a huge job destroyer?

Banks and other big companies have been using “chatbots” for years – often to perform jobs that used to be performed by humans. So far at least, the mantra from CEOs is that this has freed up staff to concentrate on other less routine tasks.

Comyn conceded it was “natural” for people to have concerns about the potential for technology to destroy jobs, but he didn’t see AI as “fundamentally disruptive” to people’s jobs in the short term.

Bank bosses are generally keen to tell their investors about how they can save money to boost shareholder returns, but so far, none of the majors have outlined plans to launch large cost-cutting programs thanks to AI.

Indeed, CBA and NAB have been keen to order their staff back to the office for more of the week, with CBA this week saying it wants workers in office blocks 50 per cent of the time.

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