Experts have said that banks must prioritise the acquisition of data, infrastructure, and technology to fully explore the potential of Artificial Intelligence.
They spoke in separate interviews with The PUNCH while making observations on how AI can revolutionise the banking industry.
The co-founder at Alty, Leo Goriev, in a chat with The PUNCH, noted that AI holds immense promise for financial and banking product development, particularly in transforming customer experience, which is the ultimate measure of success for any business.
He said, “Realising this potential demands that organisations possess a robust foundation of data, infrastructure, technology, and knowledge.”
According to Goriev, by analysing data about users’s behaviour and their preferences, a mobile application with integrated AI can provide recommendations for financial health improvement, savings planning, and efficient fund usage.
He added, “While AI is becoming increasingly prevalent in many sectors, there are doubts about its ability to completely replace human functions.
“Despite the fact that AI is rapidly penetrating various industries, we also maintain a level of scepticism regarding certain AI features claiming to replace human functions, particularly in business audits.”
On his part, the Head of Digital Banking and Alternative Channels at Al Ahli Bank of Kuwait, Ahmed EL-Nazer, observed that the prominence of AI tools for analysing customer behaviour and detecting fraud has grown significantly.
He said, “While the results thus far have been promising, it’s crucial to understand that these tools require careful utilisation and training.
Contrary to the notion of a simple plug-and-play solution, effective use of AI demands expertise and a nuanced approach. That’s why it’s imperative to acknowledge the associated challenges and drawbacks.”
Nearly 43 per cent of banking and investment firms say they are currently using or experimenting with AI technologies, according to 2023 research from consulting firm Gartner.
AI requires large amounts of data to function effectively, and banks have an abundance of data at their disposal.
A recent McKinsey report also confirms that generative AI has the potential to contribute up to $340bn in annual value to the sector, representing a 15 per cent increase in operating profits.
The report predicted that the most significant gains would be seen in corporate and retail banking, which was why companies were concentrating on leveraging large language models to enhance software development and customer service through virtual assistants.