Can AI be a Catalyst for Bank Operational Change?

Today, there is much dialogue about artificial intelligence (AI), and vendors are quickly integrating AI functions. Banks are using AI tools to work with data, handle customers at contact centers and improve fraud monitoring.

AI is different from traditional software in how code, data, processing power and interconnectivity come together. Capabilities that were not very practical to build a few years ago can now be developed in minutes.

Regulators have highlighted the need for bank governance to address the rapid and substantive changes AI is bringing. Accordingly, banks are enhancing oversight, risk management, cybersecurity and privacy processes for AI. While compliance is paramount, bank leaders can also use these efforts to address a range of challenges and position for a future of increasing technology changes.

AI can redefine what our teams do and how they do it. Banking has had many technology-based shifts over the years, including the advent of credit cards, ATMs, online banking, new payment rails and other developments that shaped the evolution of how banks operate. AI continues this progression but in more sophisticated ways.

While this can seem daunting, it can also be an incredible opportunity. AI tools can change operational dynamics between people, data and technology. In this way, AI has the potential to be a powerful catalyst for bank leaders to drive change like never before.

Bank leaders should examine how teams spend time and energy, and the relationship to real value. What are the things that best leverage people’s creativity, solutioning and engagement with customers? And how can AI support free people to perform at new levels?

We talk about efficiency ratio improvements in bank operations all the time. But with the ability to simultaneously change processes and how steps are performed, it can be transformative for today and the future.

The rate of technological change is ever increasing. This can be both a challenge and an opportunity. History has shown that organizations that innovate and evolve succeed in times of change. There is opportunity for banks to leverage AI to be part of a thoughtful for higher levels of performance.

AI in the Lead?
There are few examples of technology driving significant value for a bank. Contrary to some marketing materials, there is not an AI tool you can subscribe to that is going to take your bank into a bright future by itself. As with all tools, the stage needs to be set and supporting elements need to be in place — particularly in the complexities of bank operations.

Without supporting processes, awareness and controls — technology tools will have limited success. To drive real change, bank leaders need to look at workflows across the enterprise and apply technology. That means putting the same broad-based strategic and tactical considerations bank leaders would consider with a significant acquisition.

A fragmented approach will at best produce limited value and, at worst, expose the bank to increased risk, negative operational and compliance impacts as well as cybersecurity and privacy issues. AI is not going to lead the bank, but it can help the bank and its people perform at higher levels.

Purpose Driven Investments
Bank leaders should look at AI differently than past technology investments. Before getting to a specific use case, take time to look at the way things work in your bank. Take a critical look at the actions by both people and systems. Then in defining your use case, apply process changes to optimize how people and technology work together. Examine what requires a person, what can be automated and how do those need to interact operationally. That vision may be quite different from how things work today.

This requires a fresh perspective across leadership and management teams and should start with the things that have been inhibitors all along. Look to change frustrations like time to market with new products or services or subject matter expert single points of failure on your teams that throttle what can be accomplished with the highest levels of quality.

Technology could move from the thing that so often causes more delays, compromises and cost increases; to a true enabler for high preforming teams that consistently deliver customer and business value.

Leveraging a Catalyst
To use a catalyst, such as AI, you need to understand its properties and how it interacts with what you want to catalyze. Bank leaders need a clear understanding of AI, how to govern it and then guide the process with a focus on business objectives.

Bank leaders need to ensure the right guardrails are in place to keep focus on commitments to customers, compliance, and managing risks. They need to look at capability and performance development without the traditional lines between people and technology. Ensure your controls and protections are accomplished effectively.

Change is not going to stop or slow down, but successful bank leaders will leverage this progression resulting from AI to better team operations and the value delivered to customers.