- Automation could help North American banks unlock up to $71 billion in value by 2025, according to an Accenture study released last week. That breaks down to $59 billion in tasks that can be augmented by advancing technology and $12 billion in cost savings from tasks that can be fully automated, the study shows.
- In today’s tight labor market, companies can save time by retraining employees rather than recruiting new ones, said Cathinka Wahlstrom, head of Accenture’s financial services practice in North America. "This isn’t about cutting costs to improve the bottom line, it’s about embracing technology to transform the workforce," she said in a press release accompanying the report.
- The study surfaced as at least two systemically important U.S. banks — BNY Mellon and JPMorgan Chase — announced public commitments to boosting technology.
Banks were projected to invest more than $5 billion in artificial intelligence in 2019, according to a September report by International Data Corp., up from $4 billion last year. Meanwhile, technological advances could cost the banking sector more than 200,000 jobs over the next decade, Wells Fargo Securities predicted in a report the following month.
Still, the Accenture report emphasized a greater reliance on automation can empower human employees to focus on higher-value work such as innovation, relationship building and customer service.
"Rather than removing the human touch from financial services, technology can enable organizations to offer more personalized and more human experiences at scale," said Bridie Fanning, who leads Accenture’s talent and organization group. "By automating tasks in both the front and back office, financial services companies can provide employees with meaningful work and develop client relationships that are characterized more by human ingenuity than routine transactions."
The Accenture study cited account reconciliation and data entry and gathering as among the 10% of tasks that could see complete automation by 2025. Artificial intelligence, meanwhile, can help loan officers determine default risks more accurately and help financial advisers make personalized real-time recommendations, the study suggested.
"It’s an opportunity as opposed to something to fear," Wahlstrom told Bloomberg. "Done right, it’s going to be great both in terms of productivity savings and ultimately client experience."
Accenture’s findings reinforce Bank of New York Mellon’s recent pivot toward AI. The bank has deployed 300 bots that execute about 5 million processes across businesses and functions.
"These robots are doing manual work," Roman Regelman, BNY Mellon’s senior executive vice president and head of digital, told American Banker in October. "They’re doing stuff that humans can do, but don’t like to do, and often don’t do that well. That allows the humans we have, the employees, to spend time on more value-added activities, like spending time with clients and spending time on more complicated cases."
The bank is set to accelerate its technology spend in 2020, Todd Gibbons, BNY Mellon’s interim chief executive, said last week, without specifically detailing by how much. The bank’s software and equipment expenses in the third quarter rose to $309 million, an 18% jump from a year earlier, according to American Banker.
"The future of AI is not AI alone, but what we call AI and human intelligence," Regelman said. "It’s not about robots replacing people, and it’s not about people fighting with the machines. It’s them working together as artificial intelligence plus human intelligence. When they work together, we have something very different that fundamentally unlocks something neither can do."
JPMorgan Chase, meanwhile, is looking to use AI to develop products and services to help people build retirement savings, the bank’s chief information officer, Lori Beer, said at a conference last week, according to The Wall Street Journal.
"I do think we are uniquely positioned to really have an impact on how AI will address social-economic issues that provide wider access to financial services in our communities," she said.
That positioning is a result of the bank’s access to about 390 million gigabytes of data.
This is not to say the bank won’t also use AI for efficiencies. At the same conference, Beer said the bank has started using machine learning technology to process expense reports and determine whether they comply with company policies.
Wells Fargo fired or suspended more than a dozen employees last year for allegedly falsifying expense reports, The Wall Street Journal reported.
Automating expense-report scrutiny "[takes] some bureaucracy out of our managers’ hands," and eliminates the need to farm out the analysis to auditors, Beer said.
JPMorgan Chase has made several moves this year to enhance its AI footprint. It signed a five-year deal in July to use Persado’s AI to generate marketing copy. CEO Jamie Dimon told shareholders in an April letter that machine learning could help the bank save $150 million by better detecting credit-card fraud.