Banking GenAI #13 - Insights for COOs

Welcome to the latest edition of GenAI for Banking COOs. We hope you are enjoying the fall period looking at the lovely autumn colors outside of the window and sipping a warm pumpkin spice latte. For something to munch along, in this issue, we explore cases of leading banks around the world deploying GenAI within their organizations and we dive into the first legislation on AI passed in a US state (California):

• JP Morgan COO Daniel Pinto Speaks on Investment to Equip Workers with Generative AI
• How Generative AI Wholistically Improves Customer Service at Singaporean Bank DBS
• CIBC’s Head of Enterprise AI Platforms and Solutions, Chris Patterson, talks GenAI challenges and opportunities
• California's AI bill was vetoed but efforts continue to develop guardrails around large AI models

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1. JP Morgan COO Daniel Pinto Speaks on Investment to Equip Workers with Generative AI

Lindsey Wilkinson, a reporter for CIO Dive, recently covered a presentation by JPMorgan Chase’s COO Daniel Pinto at the Barclays Global Financial Services conference in September of this year. In the presentation, Pinto emphasized a disciplined approach to harnessing the potential of Generative AI[RD1]?[FE2]?[GH3]? as JPMC continues to ramp up its AI initiatives. Pinto estimates that its AI use cases could yield up to $2 billion in value, up from an estimate of $1.5 billion made earlier this year. The GenAI focus is on efficiencies in routine tasks like emailing and report writing. This strategic shift opens more time for employees to engage in higher-value work and highlights the importance of robust employee training.

JPMorgan's rollout of its LLM Suite, powered by OpenAI’s ChatGPT, equips 140,000 workers with advanced AI capabilities, as per CNBC. This marks a significant transition just a year after the bank restricted ChatGPT usage to protect proprietary data. This pivot underscores the need for COOs to prioritize generative AI initiatives, as other banks are likely to follow suit.

As JP Morgan accelerates its GenAI journey, peer banks also need to do a lot of soul searching on whether they are doing enough as the gap continues to widen. For COOs, Pinto's perspective also shows the importance of investing in talent and culture, while also ensuring responsible AI use.

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2. How Generative AI Wholistically Improves Customer Service at Singaporean Bank DBS

The Development Bank of Singapore (DBS) has increased the efficiency and effectiveness of its customer service group by empowering it with generative AI. The AI transcribes real-time conversations for Customer service officers (CSO), allowing them to search the bank’s knowledge base speedily. This means CSOs save time from manually searching for documents, forms, or information because the AI assistant readily provides a direct link to said documents, forms, or information. The AI also provides post-call summaries and pre-fills any service request documents for CSOs, increasing their overall capacity to engage their customers better or increase the number of people they might assist. ?These specific activities highlight how the implementation of generative AI modernizes a customer service group –and why DBS is excited to expand the usage of generative AI.

As DBS rolls out the AI assistant to its markets, for consumer and corporate customers servicing, they expect a reduction of handling time by up to 20% because of its transcription and solutions accuracy of nearly 100% – marking the operational standard for a leading customer service group. Given the AI’s success at empowering CSOs, it’s unsurprising how close to 90% of CSOs are looking forward to leveraging it to “help remove repetitive tasks” and “free up bandwidth for [the team] to engage our customer more deeply.”

This case study is yet another example of how Generative AI implementations drive value gains for an organization. The reduction in handling times represents a tangible metric for the value Generative AI provides. DBS understands the potential AI has in unlocking value across its organization, and its efforts are recognized by Harvard Business School too which has built a case study on it.

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3. CIBC’s Head of Enterprise AI Platforms and Solutions, Chris Patterson, talks GenAI challenges and opportunities

CIBC's Head of Enterprise AI and Platforms, Chris Patterson, was recently interviewed to discuss the bank's challenges and opportunities related to Generative AI. At CIBC, Patterson stated that advancements in generative AI are viewed as transformative opportunities for enhancing client interactions and internal processes. The bank has already integrated AI into critical functions, including sophisticated risk management, fraud detection, and information security models that aid in client loss prevention. Their GenAI-focused initiatives extend to contact centers and productivity tools like the internal chatbot and CIBC-AI, which utilizes ChatGPT.

While the bank has seen great success utilizing generative AI, CIBC faces challenges in achieving a unified understanding of effective implementation as client eagerness to leverage this technology grows. Issues such as data compatibility with large language model (LLM) requirements and the variability in response accuracy remain points of focus for the bank. Patterson emphasized the importance of thoughtful integration, stating that generative AI can be revolutionary only if executed correctly.

Patterson spoke on the choice between vendor and bespoke AI solutions, and how he recommends decisions be made based on factors like cost, risk, ease of integration, and expertise. Pilot programs at CIBC have proven effective through utilizing this selection criteria, demonstrating the value of careful planning in deploying generative AI initiatives. For COOs, the takeaway is clear: a strategic approach that prioritizes client needs and considers practical implementation factors is essential for realizing the full potential of generative AI in the banking sector.

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4. California's AI bill was vetoed but efforts continue to develop guardrails around large AI models

As Pascale Davies wrote in the Euronews, in line with governments worldwide seeking to regulate AI, California joined the effort with its bill passing the State Assembly and Senate in August. Signatories warn of potential risks from advanced AI models, such as biological weapon development and infrastructure attacks.

The bill attempted to establish safety protocols for large-scale AI models, especially those requiring over $100M in data. It would have introduced whistleblower protections and grants the California Attorney General the right to sue AI companies for significant harm, defined as mass casualties or damages exceeding $500M. It would have allowed rapid shutdowns of unsafe models and mandates continuous testing. This legislation followed the EU’s AI Act, which categorizes AI models by risk level, with stricter regulations for high-risk systems like healthcare. While the EU Act addresses broader system risks (including structural discrimination), California’s bill focused more on future AI and foundation models, with specific thresholds and transparency requirements.

However, while the bill passed the State Assembly and Senate, it was vetoed by the Governor. As per Euronews, the path forward is for the State to partner with several industry experts to develop guardrails around powerful AI models.

It is worth keeping an eye on these emerging policies and approaches. As AI gets integrated across the banking and capital markets ecosystem, it is unavoidable that we will have some kind of regulatory framework in the future to ensure all actors behave appropriately. Banking leaders should continue to proactively adopt Responsible AI practices from day one to ensure that they are ready and market leading even though the regulation takes some time to catch up.

We hope you found these insights helpful! Stay tuned for upcoming editions packed with insights, industry intel, and practical tools to navigate the exciting future of GenAI in Banking together.

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#GenAI #COO #BankingOps #Innovation #ArtificialIntelligence #BankingTechnology #Banking #Transformation #Operations #ZeroOps #CapitalMarkets #Banking #GenerativeAI #LLMs

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This issue of the newsletter is brought to you by Accenture’s Rajat Dev | Nazat Dowla | Francesco Erriquez | George Heathcote | Alfonso Berguido | Felix Lasnier

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For additional details on topics above, please reach out to below:

Editors: Rajat Dev, Nazat Dowla, Francesco Erriquez

1.?JP Morgan COO Daniel Pinto Speaks on Investment to Equip Workers with Generative AI: George Heathcote

2.?How Generative AI Wholistically Improves Customer Service at Singaporean Bank DBS: Alfonso Berguido

3.?CIBC’s Head of Enterprise AI Platforms and Solutions, Chris Patterson, talks GenAI challenges and opportunities: George Heathcote

4.?California's AI bill was vetoed but efforts continue to develop guardrails around large AI models: Felix Lasnier

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