As technology giants increasingly dominate the limelight as far as cutting-edge technology is concerned, artificial intelligence in banking and other financial services are showing signs of interest and adoption.
As such, this article aims at studying the AI applications of leading banks in a bid to assist you in answering the following questions:
- What typical trends do their innovation efforts indicate-and what does that entail for the future of banking?
- What types of AI apps are now in use by employees and customers and what applications are banking leaders like Wells Fargo or JPMorgan Chase currently working on?
- What amount of money has been invested in emerging technology innovation and AI across top US banks?
By combining quotes and facts drawn from company executives, the article seeks to present a brief analysis of AI implementation by five leading commercial banking institutions in the US, based on the Federal Reserve ‘s ranking. Furthermore, we will look at the applications of each bank.
1. JPMorgan Chase
JPMorgan Chase is undeniably a top investor in technology. In fact, the bank recently unveiled a Contract Intelligence (COiN) platform developed to “analyze legal documents and extract important data points and clauses.”
While a manual review of 12,000 yearly commercial credit agreements can take approximately 360,000 hours to complete, results of an initial implementation of this COiN technology revealed that the same process can take just seconds.
Aware of the widespread potential of this machine learning technology, JPMorgan Chase is looking for more ways of implementing the COiN platform.
“I have never been more excited about the opportunities ahead. Our focus on innovation and aggressive optimization to meet new challenges will continue to result in dynamic changes to our operating model as we best position our businesses for the future.” –said CEO Matt Zames in the 2016 Annual Report.
JPMorgan invested more than $9.5 billion in technology back in 2016, with $3 billion “dedicated toward new initiatives.” About $600 million was set aside for “emerging fintech solutions.”
2. Wells Fargo
Back in February, Wells Fargo announced the creation of a new Artificial Intelligence Enterprise Solutions team in a move to take advantage of emerging technologies while spearheading the improvement of its organizational structure.
The AI group operates under the Payments, Virtual Solutions, and Innovation group. The group has three major goals including:
“…increase connectivity for the company’s payments efforts, accelerate opportunities with artificial intelligence, and advanced application programming interfaces to corporate banking customers, “said the Head of Wells Fargo’s Innovation Group Steve Ellis.
Through its revolutionary competitive Startup Accelerator program, Wells Fargo is influencing the future of fintech. It has received more than 1,100 applications from more than 50 nations worldwide.
3. Bank of America
While still commemorating a decade of mobile banking operations this year, Bank of America Corporation recently initiated a major move into AI technology, particularly with the launch of Erica, an intelligent virtual assistant.
Erica is a chatbot that takes advantage of “predictive analytics and cognitive messaging” in a bid to deliver financial guidance to Bank of America’s more than 45 million customers.
“We want to be there for customers in the moments that matter most. Incorporating artificial intelligence into our mobile banking offering will help customers manage their simple banking needs more efficiently and consistently, which then allows our specialists in our financial centers to spend more time with customers to understand their more complex needs and help them improve their financial lives,” said the President of Retail Banking at Bank of America Thong Nguyen.
The Bank of America reported a $3billion innovation budget in 2016 as well as during the Annual Technology Innovation Summit hosted in Silicon Valley. With strategic investment in AI and technology, the company is set to achieve record-breaking growth.
CitiBank has created a succession of innovative collaborations with leading tech companies in a bid to grow and boost its services. This effort is owed to its focus on attaining a competitive edge in the market. Thanks to its acquisitions and investment wing dubbed Citi Ventures, CitiBank has a global network of technology companies that take part in all its six Citi Global Innovation Labs.
“The future of financial services will be transformed by those who can successfully leverage APIs to connect consumers with best-of-breed providers, Citi Ventures is pleased to support Clarity Money, which is committed to responsible finance and is empowering consumers via APIs with actionable insights and third-party products that can help improve their financial health,” said the Managing Director of Citi Venture Luis Valdich.
5. Bank of NY Mellon Corp
The Bank of NY Mellon Corp., a 233-year-old financial company, is banking on bots, in particular, the robotic process automation (RPA).
RPA combines artificial intelligence and is conducted by both software applications and physical robots. These applications known as Internet bots or web robots are programmed to process automated activities.
“If you think about smart automation, robotics is a piece, workflow is a piece, and we’re combining smart forms, optical character recognition, workflow and robotics to get momentum around automating tasks,” said the Senior Executive Vice President and Global Head of Client Service Delivery Doug Shulman.
According to BNY Mellon, the implementation of RPA has resulted in the following outcomes:
- ¼-second robotic reconciliation of a failed trade versus 5 to 10 minutes by a human being
- 66% enhancement in trade entry turnaround time
- 88% enhancement in processing time
- 100% accuracy, particularly in account-closure validations across systems
From a financial standpoint, the corporation projects that the operations of its “funds transfer bots” is in charge of $300,000 in yearly savings. The bots reduce the time employees spend in resolving data errors and spending processing payments.
Aside from the reduced costs and increased efficiency in the Bank of NY Mellon Corp’s 2016 annual report, industry competition is also highly stressed as another reason for the bank’s high integration of AI technology.