Big tech companies are betting that a new wave of smaller, more precise AI models will be more effective in meeting the needs of businesses in industries like law, finance and healthcare.
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LONDON — More and more financial services companies touting the benefits of artificial intelligence when it comes to increasing productivity and overall operational efficiency.
Despite bold claims, many companies are failing to deliver tangible results, according to Edward J Achtner, head of generative AI at the British banking giant. HSBC.
“Frankly, there’s a lot of success there,” Achtner said during a panel at the CogX Global Leadership Summit alongside Ranil Boteju – another AI leader at rival British bank Lloyds Banking Group – and Nathalie Oestmann, director of NV Ltd, a venture capital fund consultancy firm.
“We have to be very clinical about what we choose to do and where we choose to do it,” Achtner told attendees at the event, held at London’s Royal Albert Hall early of week.
Achtner explained how the 150-year-old lending institution adopted artificial intelligence from ChatGPT – the popular AI chatbot from MicrosoftThe OpenAI-backed startup burst onto the scene in November 2022.
The HSBC AI leader said the bank has more than 550 use cases across its AI-related lines of business and functions, ranging from combating money laundering and fraud to helping from machine learning tools to supporting knowledge workers with new generative AI systems.
One example he gave was the partnership HSBC has in place with the internet search titan. Google on the use of AI technology to combat money laundering and mitigate fraud. This rapprochement has been in place for several years, he said. The bank has also looked deeper into genAI technology much more recently.
“When it comes to generative artificial intelligence, we need to clearly separate it” from other types of AI, Achtner said. “We approach the underlying risk in generative matters very differently because while it represents incredible potential opportunities and productivity gains, it also represents a different type of risk.”
Achtner’s comments come as other figures in the financial services industry, particularly startup executives, have made bold claims about the level of overall efficiencies and cost reductions they are seeing from investments in AI.
Buy now, pay later company Klarna says it has taken advantage of AI to offset lost productivity from shrinking its workforce as employees leave the company.
The company is implementing a company-wide hiring freeze and has reduced the overall workforce from 5,000 to 3,800, an approximately 24% reduction in headcount, with help from AI, CEO Sebastian Siemiatkowski said in August. He plans to further reduce Klarna’s workforce to 2,000 people – without specifying a date for this goal.
The Klarna boss said the company was reducing its overall workforce amid AI’s potential to have “a dramatic impact” on jobs and society.
“I think politicians should ask themselves today whether there are other effective alternatives to support people,” he said in an interview with the BBC at the time. Siemiatkowski said it was “too simplistic” to say that the disruptive effects of AI would be offset by the creation of new jobs through AI.
Oestmann of NV Ltd, a London-based company that provides consulting services to executives at venture capital and private equity firms, directly addressed Klarna’s actions, saying that headlines around such workforce reductions induced by AI are “not useful”.
Klarna, she suggested, likely realized that AI “makes it a more valuable company” and so incorporated the technology as part of plans to reduce its workforce.
The results Klarna sees from AI “are very real,” a Klarna spokesperson told CNBC. “We are publishing these results because we want to be honest and transparent about the impact that genAI is having in the real business world today,” the spokesperson added.
“Ultimately,” Oestmann added, as long as people are “trained appropriately” and banks and other financial services companies can “reinvent” themselves in the new AI era, “this will not that help us evolve. She advised financial firms to pursue “continuous education in everything they do.”
“Make sure you try these tools, make sure it’s part of your daily life, make sure you’re curious,” she added.
Boteju, head of data and analytics at Lloyds, highlighted three main use cases the lender is considering when it comes to AI: automation of back-office functions such as coding and technical documentation , “human in the loop” uses like prompts for sales staff, and AI-generated responses to customer queries.
Boteju stressed that Lloyds is “moving cautiously” when it comes to exposing the bank’s customers to generative AI tools. “We want to get our guardrails in place before we start extending them,” he added.
“Banks in particular have been using AI and machine learning for probably 15 or 20 years,” Boteju said, noting that machine learning, intelligent automation and chatbots are things that traditional lenders “have been doing for some time.”
Generative AI, on the other hand, is a more nascent technology, according to the Lloyds director. The bank is increasingly thinking about how to scale this technology, but “using the current frameworks and infrastructure that we have”, rather than significantly shaking things up.
Boteju and Achtner’s comments align with what other AI leaders in financial services have said previously. Speaking to CNBC last week, Bahadir Yilmaz, chief analytics officer at ING, said AI is unlikely to be as disruptive as companies like Klarna suggest with their public messaging.
“We see the same potential as them,” Yilmaz said in an interview in London. “It’s just that the tone of communication is a little different.” He added that ING primarily uses AI in its global contact centers and internally for software engineering.
“We don’t need to be seen as an AI-driven bank,” Yilmaz said, adding that with many processes, lenders won’t even need AI to solve some problems. “It’s a really powerful tool. It’s very disruptive. But we don’t necessarily need to say we’re putting it on all foods.”
Johan Tjarnberg, CEO of Swedish online payments company Trustly, told CNBC earlier this week that AI “will actually be one of the biggest technology levers in payments.” But despite this, he noted that the company is more focused on “AI basics” than transformative changes like AI-driven customer service.
Subscriptions are one area where Trustly is looking to improve the customer experience with AI. The startup is working on a “smart billing mechanism” that would aim to determine the best time for a bank to accept payment from a user of a subscription platform, based on their historical financial activity.
Tjarnberg added that Trustly is seeing almost 5-10% efficiency improvement from implementing AI within its organization.