Redefining banking: AI
Stuart Hulme, director of savings and marketing at Hampshire Trust Bank | 17:47 Tuesday 26th March 2019
This is an exciting time for financial services as a new era of interrelated technologies, including artificial intelligence (AI), robotics, blockchain, machine learning, cloud computing and data science, are causing widespread technological and digital disruption in the industry.
Welcome to the first edition of our ‘redefining banking’ series which explores AI technologies.
AI technology enables computers and machines to simulate and augment human intelligence. AI is not a single technology, but a range of innovative technologies that are continually evolving. Essentially, it is a machine that can sense, comprehend, act and learn. It can understand and analyse the information it receives. It acts based upon its understanding of the world around it and by learning from experience.
These technologies are having a transformational impact on redefining banking products and services. By collecting data and identifying patterns and relationships, the machines can predict outcomes to increase efficiency and output. By allowing these machines to learn, adapt and improve, they can create exceptional value; streamlining operational processes and delivering tangible business outcomes, driving growth, profitability and sustainability for banks and other businesses.
However, AI is not a full-service solution, it is best used as a complementary technology. At HTB, we believe there is enormous value in a relationship-based approach to banking. Which is why we prioritise building and maintaining trusted business relationships and take a consultative approach with our brokers and customers. Having a relationship-centric approach allows us to provide greater flexibility in loan approvals and enables the delivery of a personalised service. So, where AI can be useful with developing intelligent products, algorithmic trading, data management and enhanced judgement, we believe that the key to long-term, sustainable success is a collaborative approach.
There is a growing concern that AI technologies will replace employees. So, it is important to stress that these technologies will have a positive impact. Their functionality can remove monotonous and repetitive tasks from daily work, which will allow room for more rewarding and higher-value roles. AI will have wider impacts on a business and so it is important to communicate its benefits to employees and how it can improve their daily work for enhanced productivity and job satisfaction.
The banks that will benefit the most from AI technologies will be the ones that are prepared to reconsider their existing approach to people, processes and data. While organisations are increasingly using AI technologies to automate existing processes, the true innovators are rethinking their businesses’ fundamental framework and creating new opportunities to structure work more effectively, leveraging technology to transform traditional business models. Banks will need to decide which work tasks and activities can be automated, what technologies to use and what combinations of people and smart machines can effectively do the work most effectively.
To conclude, the key is collaboration with these intelligent machines. Banks need to learn how to effectively manage the human and machine relationship and implement process re-engineering. The bigger picture is not just to eliminate routine tasks and cut costs, but to create value for brokers and customers and meaningful work for employees.
SIGN UP TO OUR NEWSLETTER TO RECEIVE MORE NEWS LIKE THIS STORY
Triodos Bank creates new UK subsidiary company
Triodos Bank UK has been granted a UK banking licence to operate as a subsidiary company...
Al Rayan names new chief financial officer
Al Rayan Bank has appointed Amir Firdaus (pictured above) as its chief financial officer (CFO)...
NatWest launches biometric feature for business payments
NatWest has announced the launch of a new biometric approval feature for all business payments...
Hinckley & Rugby increases LTI multiplier
Hinckley & Rugby Building Society has increased its loan to income (LTI) multiplier across its residential range for applications up to 80% LTV...
Nationwide partners with seven fintechs to support financially squeezed
Nationwide Building Society has selected seven fintech companies to create apps that will increase financial capability...
Metro Bank to open first store in Liverpool
Metro Bank is set to open a new store in Liverpool on Paradise Street...
Investec removes SVR from all new fixed rate mortgages
Investec Private Bank has removed the standard variable rate (SVR) on its two-, three-, four-, five- and 10-year fixed rate product range for all new clients...
Mid-size automotive manufacturers miss out on £25bn in revenues
UK mid-sized automotive manufacturers could be missing out on £25bn in revenues as a result of insufficient access to funding, according to research from Wyelands Bank...
Leek United hires new finance director
Leek United Building Society has named Rob Broadbent (pictured above) as its new finance director...
Handelsbanken posts 7% lending surge
Handelsbanken has revealed in its latest quarterly results that its UK lending increased by 7% to £21.1bn in Q1 2019 compared with the same period last year...
Al Rayan Bank expands Birmingham headquarters
Al Rayan Bank has expanded its operational headquarters in Edgbaston, Birmingham...