Banks see artificial intelligence in their future, but are slow to invest in it
- Most banks believe artificial intelligence will have a large impact on the industry, but few are actually investing in the technology or even planning for it
- Despite the chatbot hype, banks are most interested in applying AI to NLP and risk analysis
"A lot felt it was expensive, a lot of people have a general lack of understanding," said Stephen Greer, an analyst at Celent and co-author of the AI report. "There's such a perception and understanding that it will have an impact, but there's a limited number of institutions doing a lot with it."
Five percent of banks said they planned to invest less than 25 percent in AI in the coming year than they did in the last.Expense and security Fifty-eight percent of banks indicated that AI might be too expensive to implement and deploy. The same percentage listed security as a concern -- although 13 percent indicated they weren't concerned about security at all. Most striking for Greer was the high percentage (31 percent) of respondents who said ethical considerations weren't at all a concern. Eliminating bias, abusing AI and displacing people's jobs all fall under the ethics category -- and they're some of the largest sources of uncertainty for most consumers who don't work with the technology hands on. Where does it go? According to PwC, most firms in banking, capital markets and wealth management say they'll rely more on human judgment than machine algorithms to inform their biggest decisions.
Further, according to Celent, banks aren't very optimistic about AI's applications for their customers. They seem most excited about using it for fraud detection -- particularly as fraudulent activity gets more sophisticated."I don't get the sense most of the industry was acutely aware of how [AI] will happen or why it will evolve," Greer said.
For some AI technologies, it takes time to digest the customer data they need and to have humans teach them how to react appropriately. Over time, the hope is that AI can reduce banks' cost of serving customers and improve customer interactions. It's hard to see that in these early stages, when AI is still in the learning stage. However, banks showed they don't expect AI to handle more than 30 percent of their front or back end operations.