Stay bold amid techno-panic; long-term tech relationship is positive-sum
Yogesh Mulwani, RVP of technology, Backbase

The arrival of ChatGPT and similar products has reignited a decades long debate about whether advanced automation, supported by artificial intelligence, will usher in the “end of work,” leading to mass layoffs as businesses replace humans with machines.

The artificial intelligence (AI) hype cycle has been building since the 1970s. And with each advancement, the chorus begins again about the workforce threats posed by the technology. But many of those fears have yet to come to pass. For example, a 2013 study by Oxford professors Carl Benedikt Frey and Michael Osborne estimated that 47% of U.S. jobs would likely be eliminated by technology over the following 20 years. Of course, that hasn’t happened. In fact, the number of jobs actually grew 25%.

However, there is no denying that, with the growing capabilities of large language models like ChatGPT and other AI applications, the emerging technology will permeate through every part of corporate America. Soon, common business processes, like customer support, will be entirely automated. And companies will increasingly be able to use data to build hyper-personalized customer experiences.

That should be welcomed. Only by changing our mindset about the looming AI revolution will banks, their employees and their customers be able to begin to reap the benefits that the coming decade of innovation will offer.

Changing the narrative

For too long, automation has been discussed as a job killer instead of a time creator.

That’s especially true in financial services. In fact, bank chief executives regularly speak about the hundreds of thousands of human jobs that could be lost to robots. Understandably, that’s driving new worries among workers about the future of their roles.

What is lost in the discussion is how much employees will gain when algorithms can automate the mundane workflows that chip away at our ability to tackle the larger, more in-depth projects that humans are built to do.

For example, it’s becoming possible to automate many of the humdrum tasks that monopolize an accountant’s time every day, like data entry, freeing them up to spend more time analyzing and interpreting the information. Companies also won’t have to think about cybersecurity as much, as many of the modern IT platforms provide all the necessary bank-grade security capabilities.

As areas like customer onboarding and support get put on autopilot as a result of advanced chatbots, bank employees will be able to devote more time to creating more dynamic and personalized customer experiences using all the data now accessible as a result of the modern IT infrastructure that is used to support AI and machine learning.

Unlocking the power of data

Creating personalized customer experiences is difficult for banks because the data that’s needed to power the machine learning models is stored in many different places. For example, traditionally, all the interactions on the mobile application might flow to one storage center, while all the data from the website or customer service channels flows to another.

To build unique profiles of customers that power more seamless interactions, banks must have continual access to high-quality and comprehensive data sets from every different touchpoint that people have with their financial partners.

New, cloud-based technologies make it possible to access data across any interactions with a bank’s service. Aggregating all that information from multiple sources into one area will enable banks to now build those hyper-personalized experiences. Such a system will also make it possible for financial institutions to start using predictive analytics to help customers make informed investment decisions, among other use cases.

It doesn’t stop there. Better access to data will help banks better detect fraud, improve their credit-risk assessment frameworks, and begin to use criteria beyond credit scores — like spending and bill payment patterns — to evaluate applicants for loans.

As machines begin to eliminate many of the small tasks that often dominate our days, there will be a shift in priorities in the financial industry. What will become increasingly valuable is our human capacity for empathy and intuition, as well as the emotional connection we’re able to make with others. These attributes enable us to maintain a long-term view of a bank’s progress and mitigate potential problems.

The swift rise of AI doesn’t have to be feared. Instead, banks and their employees should take the time to understand the technology and learn how it can be used to make their operations easier. Like the web browser and the mobile phone before it, AI holds the promise to completely change how we work and connect with one another. We just have to let it.

Yogesh Mulwani, RVP of Technology at Backbase.