How will AI change the way banks and insurers do business? Photo / 123RF
How will AI change the way banks and insurers do business? Photo / 123RF
Artificial intelligence will be used to augment human insights to allow those who work in financial services to give better advice to their customers rather than it being a replacement for them, a senior Microsoft executive says.
Bill Borden, corporate vice-president of financial services for Microsoft, was inNew Zealand for just two days this week before moving on to Australia to talk to the major banks and financial firms about their pain points and how technology could help solve them.
Borden said six major trends were emerging across the globe; how to do more with less, engaging with customers, attracting and retaining talent in the tight labour market, tackling cybercrime, advancing sustainable finance and, underpinning all of those, exploiting data and insights.
Microsoft’s recent investment in ChatGPT parent Open AI had sparked lots of interest, Borden said.
“ChatGPT, that’s obviously on everyone’s mind right now. We are very excited about that because of the nature around how that builds off of our data and data strategies that we have been working on before around insights to drive action and how do you flip the model.”
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He said historically financial services businesses had always reacted to data.
“Before computers, it was based on a customer who called you up, had a question about their account, you rolled over to the cabinet, pulled out their file and hard copy and said okay this is what it is. Then we put all that in computers and databases but it was still the same reactionary model.”
“You have already done the insights and analytics to expect that person is going to call you - or when that person calls you they are going to have a question that could be in this vein.”
He said artificial intelligence was already pre-empting equipment failure in manufacturing by ordering a replacement part before it had even failed.
“You should be applying that across all use cases. That’s the cool part about insights, it’s not just insights to be prepared to react, it’s insights to start proactively doing things.”
Borden said AI would augment what bankers did rather than replacing people.
“If you are going to create technologies and change the world you have also got to do it in a way that’s going to be safe, secure, compliant, inclusive. We have a whole notion around responsible AI and how we build products from start to finish and how we have policies and governance around responsible AI.
“So when you think about it, it is really the augmentation of technology plus human insights. That’s the ultimate goal.”
He said there had been predictions of technology replacing this or that in the past.
“Employment and the use of people changes. It doesn’t replace. It allows human beings to do different things. Higher value things. I think you are going to see that continue to happen.”
He said bankers could use data and AI to help interact with customers by getting a fuller picture of what had changed in the market and how that could impact the customers’ plans to give them specific analysis and recommend specific actions or products and services.
“Those are all giving me tools so when I pick up the phone and call you I can have a much richer dialogue around what I could do for you.”
He said the conversation could also be recorded with AI used to help analyse the conversation afterwards to help pick up on anything that was missed or even help generate follow-up communication.
“Those types of things are real. There has been a lot of productivity insights but now to supercharge it with additional insights that AI can offer is going to be really exciting.”
Bill Borden, Microsoft's corporate vice president worldwide financial services. Photo / Supplied
Borden said there were also opportunities to allow front-line workers to have the same 360-degree view of a customer as middle and back office staff meaning any decision was based on the same information.
Cloud adoption was also growing strongly. Recent research it did in New Zealand and Australia indicated spending on moving information and systems to the cloud in NZ was set to double to about $5.2 billion in the next five years.
“Banking, government and manufacturing are the big drivers. But banking and financial services is the leading industry in actually driving that spend so institutions here are looking at getting out of data centres and using cloud.”
Cybercrime
Banks and insurers have reported an increasing number of scams and fraud in recent years particularly with more people transacting online due to Covid.
Borden said the financial services sector was an eco-system and cyber attacks targeted the most vulnerable point in that system.
“So that means everybody has got to look at that eco-system and look for where the weakest links could be.”
Borden said Microsoft was focused on streamlining its products for its customers while also building tools into its systems to protect the end consumer.
