The GPT-4 logo is seen in this photo illustration on March 13, 2023 in Warsaw, Poland.

Yap Aryan | Norphoto | Getty Images

AMSTERDAM, Netherlands — Major banks and fintechs claim to be piling on generative AI as the hype surrounding the buzzy technology shows no signs of fading — but there are lingering concerns about potential pitfalls and risks.

At the Money 20/20 fintech conference in Amsterdam, Netherlands, executives at large online lenders and finance companies hailed generative AI, calling it an “explosion of innovation,” saying it would “unleash innovation in areas we can’t even think about.” “

Chalapathy Neti, Head of AI at global messaging banking network Swift, called the progress made with ChatGPT and GPT-4 “mind-boggling”. “It really is a transformative moment,” he added.

But in the short term, banks are scrambling to find out the use cases.

Dutch ABN Amro is a banking giant that is experimenting with using generative AI in its operations.

Annerie Vreugdenhil, commercial director of ABN Amro’s personal and commercial banking division, revealed on a panel that he uses technology to automatically summarize conversations between bank employees and customers. It also uses it to help its employees collect data about customers to help answer inquiries and avoid repeated questions.

The bank is now in the process of expanding those pilots to 200 employees and is scouting for a number of new pilots to start this summer.

In a closed session on the application of AI in financial services, meanwhile, two bank executives explained how they use the technology to improve internal code and analyze their customers’ behavior.

said Mariana Gomez de la Villa, an executive at ING Bank specializing in strategy and innovation.

In fact, banks seemed unanimous in their reluctance to roll out ChatGPT-like tools for customer-facing scenarios.

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The lender has taken a “conservative approach” to AI, said John Andre Berracochea Alava, head of advanced analytics at Spanish bank BBVA, adding that at this point, generative AI is still “early” and “immature.”

One critical issue is that advanced AI systems require the processing of massive amounts of data – a sensitive commodity wrapped in all kinds of rules and regulations. As such, Alava said that at this point it was “dangerous” to include sensitive information from customers.

Generative artificial intelligence explained

Generative AI is a specific form of artificial intelligence that is capable of producing content from scratch. The systems take input from the user and feed it into powerful algorithms fed by large data sets to generate new text, images, and video in a way that is more human-like than most AI tools already on the market.

The technology has been highlighted after the success OpenAI’s GPT language processing technology. ChatGPT, which uses massive language models to create human-looking responses to questions, has sparked an arms race among some companies over what is seen as the next “paradigm shift” in technology.

In March, Goldman Sachs chief information officer Marco Argenti told CNBC that the bank is testing internally generated AI tools to help its developers build and test code automatically.

More recently, in May, Goldman spun off the first startup from the bank’s internal incubator – an AI-powered social media company for corporate use called Louisa. The push into artificial intelligence is part of a larger effort by CEO David Solomon to accelerate the bank’s digital transformation.

Meanwhile, Morgan Stanley uses it to inform its financial advisors of inquiries they might have. The bank has been testing an OpenAI-powered chatbot with 300 advisors so far, aiming to help its roughly 16,000 advisors leverage Morgan Stanley’s warehouse of research and data, according to Jeff McMillan, head of analytics and data in the company’s wealth management division.

AI co-pilot

These are just a few examples of how financial companies are using AI, but more as a digital assistant than as an essential part of their services.

Gudmundur Kristjansson, CEO and co-founder of Icelandic regulatory technology company Lucinity, explained to CNBC how AI can be used to help in a key area of ​​finance: fighting crime.

The company’s artificial intelligence tool, called Luci, is intended to help PR complianceaprofessionals with their investigations. In a live show, Christianson showed himself looking into a money laundering case. The AI ​​tool analyzed the issue, described what it saw, and then completed an independent review.

In this use case, the AI ​​acts as a resource — or “co-pilot” — to help the employee find data and clarify the issue rather than replacing the role of the person who looks into reports of suspicious activity.

Where do you find money laundering passes? interconnected networks of people who are primarily employed to do so. That’s why it’s hard to find. This year banks spent $274 billion on prevention,” Christianson told CNBC in an interview.

What helps Lucy, he said, is reduce the amount of time he spends trying to figure out if something is fraud or money laundering.

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One Money 20/20 attendee said the whole appeal of AI for major banks and financial firms is the potential reduction in the time and money needed to complete tasks that can take days for human employees.

Niklas Joske, Chief Operating Officer of Taktile, a startup that helps fintech companies automate their decision-making process, acknowledged that the use of AI is a challenge in the financial sector, given the lack of publicly available data.

But he stressed that it could be a “crucial” tool for reducing companies’ operating expenses and improving efficiency.

“In many fintech applications, this is done by increasing automation and reducing manual processes, particularly in onboarding and underwriting,” he told CNBC.

“This automation is really enabled by access to more data sources, which enables lenders to gain new insights and identify the right customers without having to parse dozens of PDFs to get the right piece of information.”

— CNBC’s Heo Sun contributed to reporting.


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