Human and Tech allied for Precision Banking

8 out of 10 BNP Paribas clients want banking services that are both human and technological – a logical trend, considered how beneficial this Human-Machine combination proves to be. Hybridization between digital and physical is now the new standard for many businesses and banking, insurance and investment are no exception. Clearly, Tech is supporting Human capabilities and does not replace it. The solution must be the association of Artificial Intelligence and with human understanding and empathy.

I strongly believe that technology, Artificial Intelligence and data science can drastically improve services and therefore clients’ satisfaction.

This has already proven to be the case in the medical sector, in which data and AI gave birth to precision medicine and customized healthcare by integrating data into a patient’s care to help them heal more rapidly. The French startup Owkin is a good illustration: it is developing a solution based on AI to improve medical research by predicting the response to treatments in order to find the right personalized treatment for every patient.

Precision medicine has opened doors for all sectors. Banking is no exception as we are now in the age of precision banking, insurance and all extra banking services. How exactly? By approaching precision as a whole: making our offerings much more adapted, individualized and progressing towards “Tech powered” Relationship Management.

Eventually, banking will evolve from ready-to-wear to custom-made – and not only for the most privileged clients. The power of these AI technologies lies precisely in their scalability, making it possible to offer better services to all our customers.

Data for Business

Back when I started my career as an actuary, the total data collected in the world was far less than a zettabyte. Today, the estimate for 2022 is around 100, and the projection by 2025 could be around 180. Obviously only a fraction of that data is accessible and relevant for banking, but this is to show the data science challenge ahead of us. This is to prompt the emergence of precision banking, which will be nothing short of a paradigm shift: I believe banking actors will either embrace it or lag behind. This is why at BNP Paribas we put technology at the core of our 2022-2025 GTS strategic plan and invest in tech innovation to boost our growth.

While many emerging technologies are impacting our businesses, today I will focus on AI as it helps us leverage the gigantic amount of data we are now able to collect through our operations to enhance and transform our offerings. BNP Paribas plans to develop over 1,000 use cases of AI by 2025, in an effort to channel innovation towards the tangible, specific needs of our customers. What’s more, our managers and teams will benefit from AI-induced improvements of our processes – automating report-production thanks to a natural language generation bot, for example.

These benefits, of course, extend to all fields whether it be risk management, compliance, or managerial functions.

WIRED is a good example of how we use data and IA to build precision banking and extra banking services. This digital-twin technology allows customers and prospects to?immerse?themselves?in?the?augmented?visualization?of?a?city,?neighborhood?or?building. In addition to this core feature, WIRED provides clients with a valuable layer of precision: real estate, socio-economic and environmental information (changes in rents, charges, market data, public transport…) and that thanks to internal data of rare quality enriched externally. To put it simply, our customers can visualize targeted assets in various cities with no time or space limit, and our BNP Paribas Real Estate teams can answer their questions by producing accurate and immersive market analysis and reports. As such, WIRED is a game-changer in how we go about real estate investments.

A second example: what BNP Paribas Cardif, Asset Management and Wealth Management are working on right now with Gambit .?In few words, their technologies improve Financial Suitability via our advanced profiling approach where we collect information from the investor regarding his or her knowledge and experience, financial situation, financial objectives, and investment profile (incl. ESG and risk preferences). Our methodology for collecting this information enables us to produce more personalized recommendations.

AI for ESG

I believe that a sustainable future won’t happen without Tech. First, because powerful digital tools are making ESG data collection and monitoring so much easier. They enable organizations to take a closer look at their impact and to share their ESG performance to their stakeholders in full transparency.

Greenhouse Gas emissions represent some of the key data points in sustainability. Large companies follow a global common methodology to estimate emission level, with results published &/or validated by independent auditors. Such emission estimations are limited to 3500 companies worldwide as of 2018. For another 6500 companies, external data providers offer their own estimations, which are lacking depth, as they are often limited to sector-wide extrapolations. To provide the best coverage and accurate information to its clients, BNP Paribas Asset Management leverages the full scope of internal & external data available through an “automated Carbon scoring“ AI machine-learning model. This allows to estimate more accurately the emissions for each of the 15000 companies BNP Paribas Asset Management has invested in.

?To further illustrate our efforts towards improving our ESG insights through Data and Tech, I would like also to mention our investment in Kayrros: a global energy and environmental geoanalytics company, helping investment markets make better decisions by delivering deep understanding into climate and energy-transition risks. Kayrros harnesses satellite imagery, geolocation data, textual information and multiple sources of alternative data with machine learning, natural language processing and advanced mathematics. With this strategic partnership, we ultimately aim at making our investment decisions more sustainable and impactful – and, once again, to better satisfy our clients and their growing concern for the planet.

Second, because innovative, AI-focused solutions are the best (and only) way to answer our clients’ growing ESG expectations. They are becoming more and more insistent on financial products and services that feature environmental, social and ethical dimensions– and rightly so. AI helps us address this by allowing for more accuracy and precision in our services. Let’s take an example in savings: to offer the product best suited to their client’s needs, a banker has to process and align the client’s risk profile, ESG preferences and the expected financial returns. That’s a lot of data and it will be more and more difficult to be processed with human capabilities alone. With the help of AI, it becomes easier, faster and more precise.

?Tech for Financial Inclusion?

On the social level, tech can also make banking and insurance offerings more inclusive worldwide , as proven by Kueski, a Mexican startup supported by BNP Paribas Cardif. As its founder Adalberto Flores explains, Kueski was born from the lack of basic, accessible financial services: “Mexico has the fifth rate of unbanked citizens globally, 80% of the consumers in Mexico lack access to a credit card and 78% of the merchants don’t have a POS terminal. Thanks to the AI and machine learning technology, Kueski is able to predict an applicant’s repayment ability, without requiring customers to have a bank account, a credit card or credit history.” By facilitating the daily lives of millions of people, such an innovation has a massive social impact and proves that AI can be used for better inclusion, while accelerating growth. In only ten years, Kueski has become the largest Buy-Now-Pay-Later and online consumer lending company in Latin America.

Growth, technology and sustainability are inextricably bound – with technology acting as a lever and accelerator for both growth and sustainability. Data and AI cannot be overlooked anymore or dismissed as incidental: they have a huge potential to personalize financial services for our clients and optimize working methods for our employees. It is certain that emerging disruptive technologies like Quantum computing and Web3 (with its decentralization of data) will push the boundaries even further in the coming years. BNP Paribas is particularly well connected with the Tech innovators through multiple canals: banking relationships (75% of French Tech are our clients), scouting (eg Payment Tech), FinTech & InsurTech direct and indirect investments, and acceleration programs. Our ambition by 2025 is clear: intensify our interaction with the Tech ecosystem and systematize Tech integration to become even more relevant, sustainable, and inclusive.