Amid the Hype, Is AI Right for Your Bank? By Milton Bartley, Co-Founder, President & CEO, ImageQuest Is your bank ready to navigate the rapidly evolving world of artificial intelligence (AI)? AI is transforming industries worldwide, and banking is no exception. As AI technologies become more sophisticated, banks have unprecedented opportunities to enhance operations, improve customer experiences and stay ahead of the competition. However, amid the hype, it is crucial to approach AI thoughtfully to ensure positive outcomes for your customers, employees and other stakeholders. This article provides practical tips to help you navigate the complexities of AI adoption while safeguarding your bank’s reputation. Identifying Opportunities for AI in Your Bank We recommend starting with AI applications that are simple, safe and easy to implement. Instead of immediately tackling complex areas like lending compliance or advanced data analysis, begin with foundational uses that familiarize your employees with AI technologies. Streamlining Internal Documentation with AI Utilize AI tools to help create standardized documents such as Standard Operating Procedures (SOPs). This can enhance consistency and efficiency in your documentation process. Enhancing Marketing Efforts AI-powered assistants like Microsoft Copilot can assist in generating marketing materials tailored to your clientele. By providing insights and drafting content, these tools can help your marketing team create more effective campaigns. Assisting with Vendor Due Diligence Another practical application is using AI to streamline the evaluation of vendor due diligence documents, such as SOC 1 and SOC 2 reports. AI tools can quickly scan these lengthy documents to identify and extract key sections like Complementary User Entity Controls (CUECs). This not only saves time but also reduces the risk of overlooking critical information that could impact your bank’s security and compliance posture. By automating the extraction and analysis of important details, AI can help your risk management or vendor management teams make more informed decisions when assessing third-party vendors. This ensures that your bank maintains high standards of security and compliance without overburdening your staff. Proceeding with Caution on Customer-Facing AI Currently, we advise against deploying customer-facing AI tools. These technologies are still evolving and may not reliably handle customer transactions. Moreover, many banks pride themselves on personal relationships, and introducing AI bots could risk undermining that connection. Assessing Your Bank’s Readiness for AI Preparing for AI integration involves focusing on three key areas: your strategy, your team and your regulators. Your Strategy This is critically important. If AI isn’t part of your bank’s strategic plan, it is premature to evaluate AI tools. Revisit your bank’s overarching vision and determine how an IT strategic plan incorporating AI can support it. Identify the problems, challenges and opportunities that AI can address. This doesn’t have to be a lengthy process. Collaborate with your team to explore how AI fits into your strategic plan — it might take a day but doesn’t need to span six months. Your Team It is highly likely that some of your employees have experimented with AI tools like ChatGPT, which are readily accessible and free. Similar to security training, your team needs to understand appropriate uses of AI within your bank. Educate employees and directors about the security implications, such as where information input into AI platforms is stored and how it might be used. Establish clear policies defining acceptable and forbidden uses to prevent unintended data breaches or compliance issues. Your Regulators Regulatory bodies have yet to issue firm guidelines on AI usage in banking. In the 16 West Virginia Banker
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