?? AI is entering in Banking a BIG way: AI Unleashes $1 Trillion Potential for Banks. Transforming Legacy Systems with Trust and Innovation ??

?? ?? Artificial Intelligence will unlock at least $1 trillion of additional value for banks. How ?

Banks still run on legacy systems including mainframes. Will they build greenfield AI systems or we, expect most banks to provide the benefits above the legacy systems in their own way.

??????????????????????????????, ??????????????????????, and ?????????????????? are still paramount, bridging a bank and its customers or investors and financial institutions and financial intermediaries.

Trustworthiness, reliability, and integrity are still paramount. Will AI reiterate it?

Here are few instances that shows AI is in full action on wall street. Banks are leveraging there capabilities to showcase GenAI's use cases.

Lets wait and watch. We are in AI Age. What do you say? ??

JPMorgan unveils IndexGPT in next Wall Street bid to tap AI boom ????

Bank is creating thematic investment baskets using GPT-4 model

JPMorgan Chase says “IndexGPT” is a first step in a long-term process of integrating AI across its index offering

IndexGPT is a new range of thematic investment baskets created with the help of OpenAI’s GPT-4 model. The tool generates a list of keywords associated with a theme, which are then fed into a separate natural language processing model that scans news articles to identify companies involved in the space.

In essence, it’s a largely automated way to create so-called thematic indexes, which identify investments based on emerging trends – think cloud computing, e-sports or cybersecurity – rather than on traditional industry sectors or company fundamentals.

IndexGPT simplifies financial investment by providing tailored advice based on a customer’s current financial health. Whether investing in securities or funds, customers can easily explore the market and receive personalised recommendations on suitable investment options.

Perspectives on IndexGPT as a JPMorgan Solution Platform:

1. Empowering Clients: IndexGPT empowers JPMorgan’s clients by offering them understandable and relevant investment advice. For retail investors, the tool eliminates the need to possess deep market insights. By simplifying the investment decision-making process, IndexGPT can help customers make more informed investment choices.
2. Disruption in Wealth Management: Traditional wealth managers may face stiff competition as IndexGPT offers personalized, low-cost financial advice. The tool’s potential to disrupt conventional investment advisory services is significant, particularly for clients who prefer a self-directed investment strategy.
3. Operational Efficiency and Scalability: Automated investment advice enables JPMorgan Chase to scale its services, reaching a broader client base without proportional increases in workforce. These efficiency gains could translate into better margins and increased profitability for the financial giant.

?? ?? ?? Citi has developed a solution challenges. called Citi? Smart Match that leverages the AI and machine learning technology of a fintech partner with Citi’s own proprietary assets to create tangible benefits for its customers’ businesses.

Citi, for example, is testing a solution that employs AI and predictive analytics to detect transactions that do not conform to an organization’s routine payment patterns. The system uses multiple fields in payment transactions to train itself, recognizing payment norms and fine-tuning underlying algorithms over time. When payments that are out of the norm are detected, the system sends real-time alerts to a company’s designated payment authorizers, before the payments are released, so that they can review and either approve or reject the flagged transactions. As a result, companies gain better control and monitoring of their payment flows, which leads to reductions in both errors and the subsequent losses that can result from them.

Citi Used Generative AI to Read 1,089 Pages of New Capital Rules

• Bank set up AI task forces, started pilot program for coders
• Wall Street races to adopt technology to improve efficiencies

Few more.... ?? ?? ??

At Citigroup, for instance, the firm has said it would equip its 40,000 coders with the ability to experiment with different AI technologies, and the company has said it’s used generative AI, which can produce sentences, essays or poetry based on a user’s simple questions or commands, to quickly comb through hundreds of pages of regulatory proposals.

JPMorgan Chase is scooping up talent and chief executive officer Jamie Dimon has said he believes the technology will allow employers to shrink the workweek to just 3.5 days. Deutsche Bank is using artificial intelligence to scan wealthy client portfolios. And ING Groep is screening for potential defaulters.

Generative AI “has the potential to revolutionise the banking industry and improve profitability”, David Griffiths, Citigroup’s chief technology officer, said. “At Citi, we are focused on implementing AI in a safe and responsible way to amplify the power of Citi and our people.”

?? "Building the AI Bank of the Future" ??

Here's how to build the AI bank of the future that will be the main driving force for FinTech innovation going forward. McKinsey & Company's latest research report "Building the AI Bank of the Future" narrates the futuristic architecture and steps.

????It's clear already that rapidly evolving AI technologies have the potential to skyrocket bank revenues, slash costs, and unveil untapped opportunities through improved personalisation, automation, and data-driven insights.

The potential annual value of AI in banking is estimated to be as much as $1 trillion ??But to fully leverage AI, banks need to undergo a holistic transformation spanning their engagement layer, decision-making layer, core technology/data layer, and operating model.Piecemeal AI initiatives will fall short.

Here are the most important building blocks for the AI-centric bank:

?? The engagement layer: The engagement layer should provide intelligent, personalised propositions across all channels, seamlessly integrate within partner ecosystems, and enable smart servicing with fast, simple interactions.

??The decision-making layer: The decision-making layer requires deploying advanced analytics and machine learning models across the customer life cycle for automated, data-driven decisions. This requires industrialising model development.

?? The core technology/data layer: Modernising the core technology/data layer is crucial to make systems scalable, resilient, and adaptable enough to fuel real-time AI capabilities. This includes transitioning to the cloud, having robust APIs, and developing data platforms.

?? Operating model: The operating model must bring together the right talent, culture, and organisational design in cross-functional teams to synchronise all layers of the AI stack.

The platform model creates business-tech partnerships.If done right, and put together, these building blocks will transform financial services from the ground up and allow the following:-

Hyper-personalised recommendations and insights driven by advanced analytics

- Intelligent virtual assistants and chatbots providing 24/7 customer service

- Automated fraud detection and risk management using machine learning

- Streamlined operations and reduced costs through increasing process automation

- Tailored products and pricing based on individual customer data and behaviors

- Seamless omnichannel experiences with secure biometric authenticationGoing forward, banking will be all about experiences & personalization and AI is the key technology to unlock it.

Banks that fail to become AI-first will inevitably lose to FinTechs and Big Tech competitors (think Apple, Revolut, or Klarna here).

Welcome to the new age of finance.

There have been seismic changes in the financial industry in the last few decades.

1. ??????????????????: Streamlined financial processes, replacing manual calculations with digital automation.

2. ????????????????: Connected global markets, facilitating faster transactions and access to financial information.

3. ????????????????: Introduced innovative solutions, democratising finance with mobile payments, peer-to-peer lending, and robo-advisors.

4. ????: Revolutionising decision-making, enabling hyper-personalised services, automated tasks, and enhanced risk management in real-time. Technology has digitalised how businesses promise an offer and deliver on that offer.

Despite all the technological advancements and innovations in the finance industry, trust remains the cornerstone of financial relationships, whether it's between a bank and its customers or investors and financial institutions.

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?? I am Amaresh Shinganagutti ? , and I write about #genai #promptengineering #leadership #management #life #data #productmanagement #customersuccess and #projectmanagement.

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