Ep 61: Using AI to Improve Banking and Financial Services


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In today's rapidly evolving digital landscape, the integration of Artificial Intelligence (AI) has become essential for businesses across various industries. The banking and financial services sector, in particular, is witnessing a notable transformation as AI technologies revolutionize the way financial institutions operate. Today we shed light on the impact of AI on banking and financial services, exploring topics such as improved security measures, personalized customer experiences, and the evolving role of AI decision-making in this industry.

Enhancing Security with AI:

AI has become an indispensable tool in the fight against fraud and cyber threats affecting the banking sector. As discussed in the podcast, financial institutions can leverage AI to identify and prevent fraudulent activities by implementing advanced security measures. For instance, AI-powered platforms can screen transactions, allowing banks to initiate additional security protocols, such as requesting information only known to the genuine account holder. By staying ahead of fraud attempts, banks maintain the trust of their customers and mitigate potential financial losses.

Personalized Banking Experiences:

One significant advantage of AI in the banking industry lies in its ability to offer personalized banking experiences. The introduction of conversational AI, such as chatbots, enables customers to obtain quick responses to their queries and access personalized financial advice. As noted in the podcast, AI-powered bots can cater to customers who may feel uncomfortable asking basic financial questions, providing them with valuable insights and education. Moreover, AI helps banks analyze large sets of customer data, improving their understanding of individual preferences and enabling tailored product offerings.

Ethical AI Governance:

With the growing influence of AI in banking and finance, ethical considerations take center stage. The implementation of AI governance committees, as mentioned in the episode, becomes crucial to ensure responsible and transparent use of AI technologies. These committees focus on educating users, including decision-makers, on the potential of AI, evaluating new ideas, and establishing guidelines for its safe and strategic implementation. By fostering a culture of ethical AI use, financial institutions can enhance customer trust and maintain industry integrity.e.

The Power and Potential of Generative AI:

Generative AI, as highlighted in the podcast, offers immense potential in revolutionizing banking and financial services. Advanced models like ChatGPT enable institutions to extract valuable information from documents, such as PDFs and spreadsheets, streamlining data processing and improving decision-making. However, it is essential for decision-makers in the financial industry to recognize the accessibility and capabilities of generative AI, ensuring they stay competitive in an evolving market.


The "Everyday AI" podcast episode on leveraging AI for banking and financial services showcased the transformative power of AI in this industry. As businesses aim to enhance security measures, offer personalized customer experiences, and embrace emerging technologies, AI becomes a critical enabler. By leveraging AI-guided solutions, financial institutions can stay ahead of fraud attempts, provide tailored financial advice, and improve decision-making processes. As we move forward, the responsible and ethical use of AI will remain pivotal in driving innovation and trust within the financial sector.

Topics Covered

Risks posed to financial institutions and how banks handle AI
- Implementation of AI governance committee
- Functions of the committee in evaluating and implementing AI
- Understanding of decision makers in the financial industry regarding generative AI
- Extracting information from PDFs and spreadsheets using generative AI
- Importance of adapting to using bots in the financial industry
- Personalized advice and financial education offered by bots
- Use of bots in websites for loan assistance and account support
- Guideline establishment and embracing the use of bots by banks
- Use of embedded AI and ChatGPT in platforms APIs and partnerships
- Focus on implementing guardrails to protect against data breaches
- Accuracy and limitations of ChatGPT requiring fact-checking
- Risk of younger generations relying on AI-generated code without understanding its quality
- JPMorgan's use of ChatGPT and AI in production
- Development of JPMorgan's platform called Index GPT for investment selection

Podcast Transcript

Jordan Wilson [00:00:17]:

Will Generative AI ever make its way into banking and financial services? We're going to find that out today. All right, it my name is Jordan Wilson. Welcome to everyday. AI. This is your daily Livestream podcast. Free newsletter helping everyday people like you and me not just learn about AI, but how we can actually leverage it. There's always so many new tools, so many new techniques, so much always going on in the world of AI. And that's what this show is for. It's to help all of us make sense of it, make use of it. So, as a reminder, if you're joining us live, thank you. Welcome. Please drop us a comment for either myself or our guest today, where we're going to be talking, like I said, about AI and the financial systems.

Daily AI news

But before we do, let's talk about what's going on in the world of AI news because there's some new developments. So actually, Steven, good morning and welcome. Sri from Indonesia. Thanks for joining us. All right, so probably the biggest headline of the day, meta and Microsoft having a partnership on Llama Two and making it open source, that's actually a really big deal. So there will be a lot more on this in the newsletter. But essentially Meta has been working a lot on some of their generative AI models behind the scenes and Llama Two is probably their biggest one and they are teaming up with Microsoft to make this open source. So, huge news kind of on the AI chat in the large language model base right there.

Next but not least, sorry, next we have Bing Chat has released their enterprise edition. So Microsoft as well, just making all of the headlines in the last 24 hours. So they're obviously introducing Bing Chat enterprise aimed at those companies that may not be wanting to share their data. So one of the biggest things that they're touting is being able to protect your data when you are uploading it into Bing Chat. So we will see how that's received. But if the markets are any indicator, microsoft stock soared to an all time high kind of shortly after this announcement.

All right, last news piece of the day. A new article in Fortune kind of looked at how Elon Musk is approaching his new AI company Xai. So he did all out say that he is going after creating artificial general intelligence, but an AGI that's as smart as a human and to be maximally curious and truth seeking. All right, so we have more on those stories and a bunch of other good insights today in our daily newsletter. We try to get that out around 11:00, a.m. Central standard time. So it's free. Make sure to go to your everydayai.com to read more about those stories. So as we bring on our guests, thank you for everyone else joining us. Rastafa, good morning. Checking in from Atlanta. George Strom! What's going on? Thanks for joining us. 

All right, so let's talk AI in the financial services. It's something I'm always curious about why that sector isn't picking up AI maybe as quickly as the rest. So let's bring in our guests and let's talk about this. So welcome to the show. We have Nazia Raoof, who works as a technology leader in financial services. Nazia, thank you for joining us.

Nazia Raoof [00:03:50]:

Yeah, absolutely. Good morning. Jordan, thank you for the intro. I'm really happy to be here.

Jordan Wilson [00:03:56]:

All right. I'm excited to talk just AI in financial services, but before we do, just give everyone maybe a brief background on kind of your work and your experience in this field.

Nazia Raoof [00:04:08]:

Yeah, absolutely. So to give you some context, I'm a technology leader in financial services with a focus on solving business problems with technology. So things like process automation, business transformation, and leveraging new technologies to drive business growth. And I've been on both the strategy side as well as the delivery side, and I'll talk a little bit about my early exposure to AI. So earlier on in my career, I was actually focused on more hands on roles, and then I made a pivot into more leadership roles and financial services. So my first exposure to AI was actually in college with a program called Eliza, and some people may be able to relate with Eliza. Eliza was actually created in the 60s. Not that I went to college in the 60s, but Eliza was actually created in the 60s by Weisenbaum, and it was intended to explore communication between humans and computers. And he was exploring this idea of therapist online using Eliza. So Eliza simulated conversations with you with pattern matching and substitution methodology, and that gave the users an illusion that they were actually talking to somebody. So as an example, if you said, how do you feel about your mother? Or something like that, it would pattern match and say, well, tell me more about your mother, or something like that. But if it didn't recognize the pattern, it would just say, Tell me more. And anyway, back in college, I still knew I was a little smarter than Eliza.

Jordan Wilson [00:05:43]:

Oh, it's so good. It's funny because now you have the kids as you know, they're talking with their Snapchat AI, and people are obviously talking with ChatGPT. But yeah, most people don't know about Eliza in the history of Chat Bots. It's been around for decades. But speaking of that, AI also isn't new to the financial services, right? So it's been used in many use cases, deep learning, machine learning since the even before. So why do you think, given that the banking and the financial sector has been using different forms of AI for decades, why is generative AI, your text to text kind of like your ChatGPT, all these other text to blank generative AI models. Why are they not being used right now, do you think, in financial and banking services?

ChatGPT as a complementary tool for financial advisors

Nazia Raoof [00:06:35]:

I wouldn't say they're not being used at all. If you fast forward to 2023, we saw ChatGPT as the next disruption. Right. But there are firms like JPMorgan that are using it very well. So I read on the news, JPMorgan is using 300 use cases in production. 300 AI use cases in production. So that's a lot. And they're also working on this platform called Index GPT, and that seems to be revolutionizing investment selection for customers. So if you think about a couple of decades ago, there was Robo advisors and that was kind of the big uproar. Oh, it's going to replace financial advisors and whatnot. And once they started exploring know, there are a lot of platforms like Morgan Stanley, bank of America, Schwab, they all have the robo advisory platform. But it didn't replace financial advisors. It actually complemented was more it's more of a complementary tool. And I think more firms need to see Chat GBT as a complementary tool instead of a replacement. Right. And the other risk that I also see from a financial services firm perspective is the information security. That's huge in a lot of initiatives over the decades in financial services, it was information security that was advising us, like, okay, we can have data breaches, somebody can accidentally expose this data, so on and so forth. So I think we need to explore it from information security perspective as well. Okay, what security features are we enabling so people can use it more safely?

Jordan Wilson [00:08:23]:

Yeah, that's a great point, because in the end, it is all about security, right? I'd say maybe the two industries that the everyday person kind of finds themselves interacting with, that generative AI is still not as commonplace as others, as medical and then maybe financial services. So what do you think are the biggest kind of hurdles for this technology to be more commonplace in the financial and banking sectors? Or I guess, does it even need to be do we need to be able to go on to Chase.com or our 401 and to be able to kind of you talked about Robo advisors. Should we even be able to go on there and have a chat with our 401 and to make decisions that way? What are your thoughts on that?

Firms adapting to AI and use cases

Nazia Raoof [00:09:15]:

Absolutely. And I think if there are firms that are adapting it and then there are other firms that are fighting it, the firms who are fighting it may be left behind. Right. Because then there are firms offering more personalized advice and things like that. So I've seen some of the websites already using it. So things like loan assistance or financial education. So let's take financial education for a second. The bot was actually very sophisticated in terms of educating you from a financial perspective. Okay, what do you have a question on? And then it would give you details. And then some people don't feel comfortable asking those basic questions. So this is kind of a way to educate them. And there are so many other use cases like account support, you would be on the phone with customer service or what have you for hours. And this way you can get that account support at the tip of your fingers. So there are so many use cases, I feel like banks need to figure out the guardrails and kind of move forward there.

Jordan Wilson [00:10:18]:

Yeah, I think you just mentioned something that's probably a pain point for so many of us, myself included. Right. So when you are calling into your bank or sometimes financial advisor or whatever it may be you're hit with those automated prompts, it seems like those haven't changed very much in the last 1015 years. Right. You're still trying to get a human on or they're trying to recognize your voice. So it sounds like you see that sort of technology improving in the near future. Correct?

Nazia Raoof [00:10:52]:

Absolutely. And one of the ways that I've figured out for one of the firms that I'm working with is having an AI governance committee. So the idea of an AI governance committee know there are a couple of things. One is the ethical uses of AI, whether it's at financial firms or anywhere else. I feel like that's a big topic also. So the idea of having the AI governance committee is one to educate the users, not just the heads of departments, but also other users, because we're constantly getting new ideas, hey, we can do this, we can do that. And we don't want to just shoot them down. We want to evaluate them and see, okay, how can we improve this? Right. And some of the other functions are decision making prioritizing and really looking at how we can bring them on in a safe and strategic way.

Jordan Wilson [00:11:44]:

Sure. What's been your thoughts so far? So maybe thinking outside of your official role on these projects, are people in decision makers in these financial industries? Are they understanding, I guess, the power and potential of generative AI? And maybe for those of you listening, just as an example and we've done videos of this, and I'm actually speaking at a summit tomorrow kind of on this thing, but the ability to upload a PDF with hundreds of pages and to be able to pull out stats from it or uploading a spreadsheet with millions of data points and to be able to talk to that spreadsheet and grab out the most important information. Would you say that decision makers in the financial and banking industry are well aware of how readily available this technology is?

Nazia Raoof [00:12:36]:

Sorry, just give me 1 second.

Jordan Wilson [00:12:38]:


Nazia Raoof [00:12:38]:

I'll be right back.

Jordan Wilson [00:12:39]:

Sure, no worries. All right, so as as Nazia kind of takes care of something going on there. So I think it's interesting some of the things that she said because we're talking about how accessible that all of this technology is. And definitely make sure to check out the newsletter today because we will reference some of these things that I've talked about, the ability to literally look at millions of data points in a spreadsheet, the ability to chat with PDFs, all those things. I think that there's a lot of great use cases for this technology as we look when and if it's going to be rolled out to your bank or your financial advisor or whatever it may be. So I just wanted to highlight a couple of comments here that are coming in. So Matthew, thank you for joining us. Just talking about security is paramount now, for sure. Especially, yes, that's extremely important. Also, Yaddy talking about in finance, we definitely know the power of AI, but our usage may be totally different because our AI is a backend thing dealing with security. Absolutely. So let's actually ask Nazia about, you know, kind of even what Yaddy was talking about here in the comments. So thank you for that. Talking about the power of AI and our usage as consumers is maybe a little bit different than how the banks and the financial systems might be using AI, right? How do you see even just generative AI and kind of the kind of like quote unquote future of it? How is that going to change things for the average consumer being able to get information from their bank, from their financial system?

Embedding AI in platforms and APIs while adding guardrails

Nazia Raoof [00:14:33]:

So I think one of the things that I've also seen, and I see in terms of the future where things are going is embedded AI. So even though we're not being so hesitant in using ChatGPT on its own, I'm seeing ChatGPT embedded in either platforms APIs and also strategic partnerships with startups. So that's where I see things going. So one of the things we were talking about, financial education or customer account information. So what we want to do is basically implement it in a platform so there are guardrails. So one of the biggest risks that risk and information security teams see is data breaches and whatnot. So basically putting guardrails in to see, okay, if you see people sharing Social Security numbers, let's stop it there, right? If you see the addresses and stuff like that, sensitive information being shared, let's block it, right? So there are guardrails there, whereas if you use ChatGPT now, I can take documents, like personal documents, say summarize this, which you should not be doing, right, because it's still in the initial stages. So that's one. And then two, in terms of accuracy, it's still not there, right? I was creating a strategy the other day and I said, okay, research this topic or what have you, and I thought it would save some time, but I still had to fact check it. So I don't know how much time it actually saved, but it's good at summarizing information. Where I see one of the risks is my niece is coding now, so she's like, oh yeah, and she's much younger. So she said, oh, I'm using this platform, and it gave me this code. But she doesn't know the difference between good code and bad code. So that's, again, a big risk, right? That's where companies are seeing it as a big risk. Because if you're experienced, like, I can still look decades later, I can still look at a block of code and be like, okay, this is what it does. But the younger generation who is still learning, they need to learn before they start just prompting ChatGPT to give them code.

Generative AI's risk for financial institutions' security

Jordan Wilson [00:16:47]:

Yeah, absolutely. I've talked about this in previous episodes, and this is probably beside the point, but I agree, because actually, ChatGPT and generative AI actually makes it so easy to learn that I think sometimes our brain doesn't even make those connections. But Nazia, one thing I did want to ask you about, you talked about kind of the guardrails in place and risk and security, which I think when it comes to the financial sector is a huge issue, right? Because we've all seen stories, especially we don't even talk about things like voice cloning a lot on this show. But it's so easy now to do to clone someone's voice or to act as someone else. So what's your thoughts on how that may impact security at banking? So being able to whether it's someone's voice or to create videos of someone clone people's voices, what risk does that pose to financial institutions? Because it seems like that would be for bad intent and bad purposes. It would probably normally be to go after someone's financial. So how do banks deal with that?

Nazia Raoof [00:17:56]:

So there are a lot of platforms that kind of screen for that. But I feel like people are still getting creative in terms of how to bypass some of the security measures. And I think that's where banks can leverage AI to get ahead of it. Right? Say, okay, here's the identification that they presented. Let's ask for something else. Like they would ask for something that you wouldn't know, like something from the records. Give me like a recurring transaction, actually, that's pretty basic, but something else where it's very unique, where AI wouldn't know, where a person, random person wouldn't know. So I think they have to get creative in that sense because fraud has increased a lot. And I don't have the stats on that, but it has increased a lot when ChatGPT wasn't introduced. So if they leverage AI, then it's almost like a level playing field where it's like, okay, people are leveraging AI for not good use cases. And so banks need to start using AI to kind of combat that.

Jordan Wilson [00:19:01]:

Yeah, it is funny, people using AI to combat AI. It's a strange world we live in now. But I think that's the reality of it. So real quick, just to kind of wrap up our conversation here, because we've gone all over the place and I think it's been very valuable. But moving forward, how do you see AI and its accessibility, especially, right? And how fast things are changing and how much really just added benefits that companies can have from adopting to it? How do you see this changing in the near future? Changing banking, changing financial institutions with the kind of nonstop reinvention of generative AI technology, how's it going to affect your sector?

Final takeaway

Nazia Raoof [00:19:53]:

So I think we're still in the initial stages, but just like I had given you as an example of robo advisors, right, everybody was kind of afraid of it and then they just kind of adapted it, accepted it. So I see ChatGPT as a complement to it instead of a replacement to certain things. And I think it's only going to get better, faster and more efficient. So it's just about time on figuring out what Guardrails can we have in place and really just adapt the technologies.

Jordan Wilson [00:20:24]:

All right, well, thank you again, Nazia, for joining us. And as a reminder, if you are tuning in and listening and you wanted to know more about what Nazia was talking about, don't worry, we're going to recap it all in our daily newsletter. But Nazia, thank you so much for joining us.

Nazia Raoof [00:20:39]:

All right, thanks for having me.

Jordan Wilson [00:20:41]:

All right. Yeah, we'll see you.

Nazia Raoof [00:20:43]:

All right.

Jordan Wilson [00:20:43]:

And just as a reminder, everyone, please go to your everydayai.com sign up for the daily newsletter. And if you are watching or listening on a podcast, please drop us a rating spotify apple. So we will see you back tomorrow and just about every day with everyday AI. Thank you.

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