In this episode, Adrenaline’s Chief Brand Officer Juliet D’Ambrosio joins Gina Bleedorn as the new cohost of the Believe in Banking podcast, as Sean Keathley, the former CEO of Adrenaline, moves to an advisory capacity to focus on his health. In this discussion, Gina and Juliet explore artificial intelligence in banking and the opportunities it brings to transform banking experiences. They note how the past year has been pivotal as the next wave of generative AI rolls out with powerful tools, like ChatGPT. Their conversation covers current uses of AI for banking, such as chatbots for customer service, and outlines the operational and productivity gains for banks that adopt AI. They address how banking is already an AI frontrunner as the financial industry leads the way for AI adoption, with the potential to automate anywhere between 20% and 40% of banking tasks. Finally, Gina and Juliet discuss how artificial intelligence can free bankers from the rote aspects of their roles and allow them to focus on higher-value conversations and connections with customers.
Text Transcription
Intro: This is Believe in Banking, a podcast series for decision-makers, influencers, and leaders. Featuring experts taking on the financial industry’s most pressing issues with insight and empathy. The podcast features information and conversations designed to enlighten and empower.
Gina Bleedorn (00:18): Welcome to our Believe in Banking podcast. I am Gina Bleedorn president and CEO of Adrenaline. Before we get started, I’d like to say a word about my former co-host, Sean Keathley, who was the former CEO of Adrenaline and has now moved to an advisory board capacity, as he has had health challenges. He has been fighting ALS for several years and now is going to focus 100% on that fight and his health. He has been beyond human almost in his strength in overcoming adversity and maintaining a positive outlook. He’s been incredibly strong, pivotal to our business, and we are all right behind him.
And as such, I would like to invite my new co-host, Juliet D’Ambrosio, who is our Chief Brand Officer at Adrenaline. She has been on the podcast before, but in addition to running all of our strategic engagements and branding engagements directly with clients, she’s also the head of our insights and trends research department. Juliet is very much herself and with her team on the cutting edge of trends happening in banking. So, there is no one better suited to become my co-host on this podcast than Juliet. Juliet, say hello.
Juliet D’Ambrosio (01:47): Hello, and thank you for the warm introduction. I am thrilled to be co-hosting with you, Gina. And there is no way that I or anyone could ever replace the experience, the wisdom, the point of view, the influence that Sean has had on the industry of banking in general, and insights that he brought to this podcast and his belief, his belief in banking as the lifeblood of our communities, his belief in community banking, his belief in the financial empowerment of everyone. He has paved a beautiful road that I am feeling very lucky to walk, and I am so excited for some of these conversations that we’re going to continue to have on the podcast.
I am also really excited to share that there will be a special episode coming up of Sean-isms. We are going to capture his greatest insights, his points of view and perspectives, the times that he put things as only Sean could, bringing a lot of his client-side insights, the idea that he sits next to CEOs, he is deeply connected with them and so understands where they are coming from, what their priorities are, and then has a broad perspective on those. Stay tuned this spring for that special podcast.
Gina Bleedorn (03:26): What I’d love to pivot to really an honor of Sean because he loved nothing more than to look into his crystal ball to predict what would happen in the future of banking. This is a topic he loves and one that I think the industry really needs to hear about right now, and it’s banking and artificial intelligence.
And so when we talk about artificial intelligence or AI, that may strike fear into the heart of some, but we want to help turn around that narrative. It’s not something to be feared, it’s simply just not known in its coming out year, specifically generative AI as opposed to earlier forms of AI. Juliet and her team have produced a research report on the topic, and so she is now a subject matter expert, and I’d love for Juliet to help demystify, especially for banks, what generative AI and even regular AI before that and what it could mean for the future of banking.
Juliet D’Ambrosio (04:33): Absolutely, and it is a big scary topic, but it shouldn’t be. I love the idea, Gina, that you put it into very clear and approachable terms. This is a moment of opportunity for the banking industry, really for all industry, really for society as we figure out how to navigate artificial intelligence. So very quickly, just so we’re all sort of speaking the same language, AI is simply a computer program, any computer program that is able to take in data reason through it and ultimately make some adaptation. So that’s it. AI, and it’s been around for, gosh, for over 60 years. It first generated in 1956. Why we have been talking about AI and why in fact, in just one year when ChatGPT was introduced and the mentions of AI in earnings calls leaped up 180% is because you mentioned Gina the coming out year, and that was ChatGPT.
ChatGPT is simply generative AI. It is a tool that allows any user, you or I could go to chatgpt.com today and enter in prompts that would allow us to receive back responses, images, text, videos, plans, predictions that are created by AI. So, it becomes a tool of conversation and dialogue. Therefore, the word chat, and it is able to generate net new content that does not replace what the human mind can do, but can speed it up and make it more efficient. And therefore that’s why it’s so exciting that we are on the precipice of a real evolution, if not a revolution, in the way that all of us begin to tap into the power of generative AI.
Gina Bleedorn (06:53): Chris Hyzy, who is the chief investment officer at Bank of America’s private bank, had a quote that really struck me. “AI is going to transform the global economy as surely as electricity and the steam engine did in their own times.” That’s hard to even grasp mentally, but that is the gravitas which AI represents.
We have a number of people in our own company that have started using ChatGPT as often as, or even in lieu of Googling. For instance, the day after it launched, our managing director of retail strategy, Ben Hopper asked chat GPT about branch banking and was happy to have ChatGPT, not predict the death of the branch, but instead support the right sizing of the network model that we talk about. That’s something bigger, but even smaller things. We have submitted meeting minutes into ChatGPT and had an output with next steps and a summary of key takeaways in almost shocking accuracy.
So, the idea that it is not displacing human because there is still lots of interpretation and context that a machine likely will not have, but the idea that it could speed up what we do, so that what humans do is focused on what humans can only uniquely do. And that’s going to be a big decisioning point for financial institutions. What can a machine do and what can a human do and how can we port anything and everything that a machine can do to a machine, so that humans can shine in areas where they are most valuable.
Juliet D’Ambrosio (08:41): It’s so interesting, Gina, there was Michael Abbott, who’s the senior managing director and global banking lead at Accenture, who produced a wonderful report here, phrased exactly what you said so beautifully, which is don’t think of generative AI as replacing bankers. Think of it as making them more intelligent. It’s like having Kasparov whispering in your ear as you’re playing chess. And so when we think about the idea that there are some parts of a banker’s day that can be automated, and that doesn’t mean that we are replacing that banker. There are studies that say 20% of a banker’s day could be automated up to three quarters of a banker’s day could be automated, but that allows for that extra either 75 or 25% of that banker’s day to have the higher value conversations, connections, investment in relationships with their customers, with their members. So it truly is like having Kasparov whispering in their ear that they have an amplifier of their own human intelligence so that bankers can do what only bankers can do, which is look someone in the eye, make determinations, make decisions that are empowered by this intelligence but not replaced by it. And I think that’s why when we look at the impact that generative AI has on all industries, banking is at the lead. The New York Times published an article very recently that generative AI’s biggest impact will be on the banking sector, all because there is the highest potential there for automation that then frees up people to make those human connections.
Gina Bleedorn (10:47): Especially as leaders of banking organizations, we know that the idea of AI transforming the way business is done comes caution, and again, fear at what that means for the workforce is that they have. The reality is the workforce is likely going to change in a number of different areas. While some roles may be slowly deprecated over time or really some functions of some roles become deprecated, because AI or other technology can do them, there are new jobs being created, there are upskill opportunities. There is absolutely as much opportunity here as there could be risk of negative change, and that’s really important for financial institutions to embrace right now. And if you don’t want to embrace it, you’re going to find it anyway, because it is here. So, really the only choice is to embrace it and figure out how it can help move ahead, both in mitigating risk, but in capitalizing on opportunity that it could afford.
Juliet D’Ambrosio (11:58): Absolutely. And it’s not just banking by the way that is being impacted, which is even more the reason why there cannot be a ‘head in the sand’ strategy around AI. Eighty-four percent of global organizations believe that AI is going to significantly impact their business today, in 2024. In the next, the remaining nine months of this year. There is a $15.7 trillion contribution that AI could have on the global economy. Ninety percent of leaders across all businesses, across all 15 industries are expecting to utilize generative AI solutions — not a little bit, but often over the next two years. So, the idea is not if ,not when, but how. How do we take the enormous potential of generative AI and connect it to our own humanity, to the purpose that we serve and do so in a way that creates value for everyone?
There is some really interesting customer and staff-facing AI-enabled tools that some of the biggest banks in the industry are rolling out now. We believe these are just the tip of the iceberg. Wells Fargo in late 2022 partnered with Google Cloud AI. They launched Fargo, and it’s essentially a virtual assistant. It is customer facing, and it is designed to provide users just a more intuitive banking journey. It helps them budget. It helps them plan financially. Now, it does not replace the investment bankers, the financial planners at Wells Fargo, but it helps to give users the right tools in hand and to even know what the right questions are to ask, so they are empowering the customers to then make deeper connections with the bankers when they have those conversations. JP Morgan has announced a launch of, it’s called Index GPT, which offers very similar product, a bit at a different level, more automated personalized investment guidance. So, those were the beginning of some customer facing tools.
Very interesting launched just last year, Morgan Stanley has a tool that actually equips its own financial advisors, so it’s staff facing, with an AI tool that delivers on-demand guidance on how to better serve its customers. Of all the tools, products, trends, research data and ideas that Morgan Stanley has at its fingertips, AI is able to filter and curate it in a real time way, so that its advisors can offer the best possible solutions to its customers. So all of this is, I think the theme that I’m hearing, Gina, is a theme of empowerment –greater empowerment of both customers, members, the people that banking is serving, but also the bankers themselves. That we are becoming amplified as we are serving, looking to serve our customers, which is what makes this so inspiring rather than intimidating.
Gina Bleedorn (15:32): Especially Juliet, that example of Morgan Stanley is a great one where it’s tech enabled human and there are some more community bank solutions that are trying to do the same thing. Actually, one of our favorites is called Agent IQ and different banks, including a number of our clients and credit unions have adopted that as a ‘banker in your pocket’ that yes, it is connecting you to humans, but there’s a lot of behind the scenes things happening from an AI perspective to make sure the responses you’re getting are immediate and when you need to talk to a human, you can. That is something that we believe is really big to look into for the future of banking, because it’s doing exactly what we said. It’s using AI and machine to do what machine can do, but on the very top, it’s enabling humans to do what humans only can do.
Similarly, B of A has a chat box named Erica. It launched in 2018 and it’s surpassed one and a half billion interactions and it provides 24/7 customer support. It handles transactions and questions, and it leads to reduced waiting times and improved customer satisfaction. And so Erica has been very successful for them. There is a lot of female AI tools: Alexa, Siri, Erica. Maybe women are perceived as being extra helpful and that’s why there’s a lot of female names there… But there are already things in place that are available and that are being done today with AI in banking.
Juliet D’Ambrosio (17:20): Absolutely. And there is a significant value generation upside, too. So we are helping serve customers better and customers are hungry for it. Just like you mentioned. They want to talk to Erica, just like we want to talk to Alexa to find out what the weather will be. So, we have these great personified tools, the Erica, the Siri, the Alexa that are fun to use, they’re easy to use, and they’re ultimately very valuable for customers because they’re just so helpful and they become seamless, a seamless part of your life.
I do want to underscore the fact that it’s not just about making things that are fun to use. There is real business value and that we can expect a nine to 15% increase in average operating profit when they use AI. We see a 30% average improvement in productivity of banks that have already adopted generative AI. And 40% of financial institutions today rely on AI for fraud detection and for financial forecasting. The tool is both deeply embedded and is already making those productivity and profitability gains.
Gina Bleedorn (18:45): That last point I’d like to underscore extra because the efficiency that institutions wanted to happen with essentially getting transactions out of a branch, out of a call center, it’s happening. It’s what we always wanted to happen is occurring. And so yes, again, there’s a hurdle of change. There’s a recalibration of thinking about staff, staffing and how staff changes with the optimization enablement that AI affords, but it can be all so much for the better if embraced in the right way.
Juliet D’Ambrosio (19:29): Gina, it’s so interesting. We have a futurist, a guru at Adrenaline, Chris Howe, who has said this from the moment I’ve met him five years ago, which is “Let’s automate what can be automated, so we can ultimately amplify what is human.” And often that automation that he was talking about and that could would be referring to TCRs or ITMs. Now, we’re talking about automating things that human beings don’t necessarily want to do — data entry, data cleansing, highly manual processes — now done for you with greater accuracy by AI. So, it’s not something that where the machines are coming to take our best jobs, but that they are here to take on the work that can be very difficult, so that we can do more of the work that we love to do. And that’s true of bankers, and that’s true really of any professionals.
Gina Bleedorn (20:39): There’s a reason why organizations have personified AI as people with people names because people want to talk to people, not necessarily computers. However, I think the adoption of so many of these personified helpers means that people are simply more comfortable even knowing that it may not be a human. With banking, the holy grail will be being able to connect them with a human the minute they need it, and that certainly comes to play in a physical branch location, but also on virtual channels. So, again, this is just a way of making your bank, your credit union, and your bankers smarter.
Outro: You’ve been listening to Believe in Banking, a podcast series created to empower decision makers, influencers, and industry leaders in financial services. Be sure to also join us on our flagship site, believeinbanking.com.