Emerging technologies and artificial intelligence were discussed frequently on day four of Sibos. During a panel talk on the growing significance of disruptive innovation and AI, moderator Dean Garfield, President and CEO of the Information Technology Council, led the debate on how and why banks need to innovate.
He began the session by asking panellists the question on everyone’s minds: Do banks still matter? Axel Lehmann, Chief Operating Officer at UBS had a succinct response: “Banks play an important role in society, and they now need to proposition services to match the consumer needs.
“Banks that have a clear strategy are a big asset to customers.”
Alex Manson, Global Head of Transaction Banking at Standard Chartered agreed with Lehmann’s comments. He stated that banking nowadays is often perceived as a method of sending and receiving payments, and a way consumers can store wealth.
“Banks actually matter for something else; for connecting consumers and communities around the supply chain. This notion is taken for granted,
“Even though the community is virtual and digitised, the connecting value that banks enable will last.”
Harvard University’s Amber Case agreed: “Society runs of abstractions of value – they need to be stored somewhere.”
AI crucial for transformation in banking
The effects of technology innovation within the financial services industry are at a scale that’s never been witnessed before.
By adopting cognitive computing and machine learning early, banks have the opportunity to achieve significant financial benefits. Automation is especially relevant for middle- and back-office processing. Banks globally are already benefitting from chatbots, robo-advisers, machine learning, and so much more. It’s therefore no surprise that big tech companies are making significant investment in AI.
All three panellists agreed that the greatest innovations in banking are going to be in user experience and reducing the complexity of a customer’s journey.
Amber Case continued: “When a person gets a cold they don’t suffer badly – but when a bank gets hacked, that’s a big problem.
“Banks need to focus on its infrastructure in order to keep up and protect against attacks, and update the digital experience for the consumer.”
Lehmann continued: “Customer experience is the game in town – you need to seek from your customers on what you want to deliver.”
“Efficiency is the biggest challenge – the more work we do, the more it will benefit the industry”, he continued.
“AI is the buzz word is of the year – it will fundamentally change the way we operate.”
Amber Case stated how, as consumers, we interact with bots more than we think. When we search for something on Google, bots provide the information - everything is automated and has been for a few years, but it’s only really surfacing now.
“AI isn’t there to do something for you or replace you – it’s augmenting you. Combine a person with average skills with great computer skills and AI will be able to beat someone extremely skilled.
“When it comes to AI, you want to automate the things you don’t want to do to make time for the things that you do.”
Moving past legacies
In the midst of regulatory changes that are driving innovation between fintechs and banks, re-structuring a business is mandatory. Standard Chartered’s Alex Manson stated that business need to have the courage to discard historically ways of operating and explore new methods that align with the markets. Manson believes that learning is key, both for banks and bankers, and that learning is not a failure but a successful and rewarding experience to challenge a workplace.
The good news here is that banks have the competitive edge when it comes to access to customers’ and financial data at a significant scale. In the midst of digitisation and regulatory initiatives coming into play, banks will need to be more customer-centric with a digital strategy to succeed.
Innovate to stay relevant
The closing speech was made by none other than Microsoft CEO Satya Nadella, who based his discussion around the challenge to stay innovative as a business and why the need for computing in our lives is only going to increase.
Nadella summed up the concepts that he’s most excited about: mixed reality, why every experience will be infused with AI but with decent datasets, and the innovations of computing.
“You can’t get fit by watching others go to the gym. That’s what we need to do to build intelligence and innovate.”