AI Report Digital - Flipbook - Page 3
Dear Reader,
Generative AI may be the latest technology buzzword, but artificial intelligence doesn’t have to be big,
bold and buzzy. Sometimes AI can feel exceptionally simple — for the end user, at least.
Take the proliferation of chatbots, a technology that dates back to a 1966 program called Eliza. The program encouraged people to share their thoughts and feelings with an AI therapist —and showed that conversations between humans and AI were possible.
Decades later, corporations were using chatbots to help customers. In 2018, Bank of America Corp.
launched Erica. Equipped to assist customers with their banking, lending and investing needs, the chatbot
handled 170 million interactions in the third quarter 2023 alone. In collaboration with vendors, smaller
institutions have deployed chatbots, too. In 2021, Michigan State University Federal Credit Union in East
Lansing, Michigan, launched a chatbot that handled roughly 45,000 conversations a month.
But AI can do more than interact with customers. It can operate behind the scenes, flagging fraud or
assisting human resources to find the right talent.
In this report, sponsored by Microsoft Corp., we dive into potential opportunities for AI in the financial
services industry, and how organizations are building teams to identify their “next best action” — an AI
term for making predictions and decisions.
To take advantage of the technology, financial institutions should start with small projects and identify partners that can help them execute, says Daragh Morrissey, director of AI at Microsoft Worldwide
Financial Services. “Don’t try and build everything yourself.”
As regulated entities, financial firms must also look out for risks. For the first time, the Financial Stability
Oversight Council in December 2023 noted AI’s potential impact on the safety and soundness of the financial system. In response, FSOC recommended that “financial institutions, market participants, and regulatory and supervisory authorities deepen expertise and capacity to monitor AI innovation and usage and
identify emerging risks.”
With all eyes on AI, you can use this report to further your own knowledge of the technology. And for
those excited to explore this new frontier, I hope you’ll leverage those insights to develop your own realworld approach.
Sincerely,
Emily McCormick
Vice President of Editorial & Research
Bank Director
Contents
The Start of Something Big
2
Checklist: Next Steps
12
Next Best Action
6
The Data Problem
13
AI in the Real World
8
Navigating Rules & Ethics
14
