Banks are Realizing the Value of AI Adoption | Rochester Business Newspaper

The interest and application of artificial intelligence (AI) in the world of banking and finance is heating up.

In the first quarter of 2023, Insider Intelligence reported that AI inquiries from banks increased fivefold over the same period in 2022 at Eigen Technologies, a research-driven AI company that has assisted financial giants such as ING and Goldman Sachs.

And, according to Business Insider Intelligence, banks are projected to save $447 billion by the end of 2023 by deploying AI applications that assist in myriad areas such as customer experience, employee training, data analytics, risk mitigation and operations.

Here in the Rochester region, how are local banks and other financial service providers using AI, and where do they see it headed in the future?

Aaron Friot has worked for DeWitt’s Community Bank since 2003, starting as a technology support specialist and now serving as senior vice president, chief technology and operations officer.

When he started working at a bank, right after graduating from Clarkson University with a degree in computer engineering, artificial intelligence was not much talked about.

There was older technology to help with automation, but RPA [robotic process automation] the technology you see now for AI is leaps and bounds from where it was, Friot said. There is a huge amount of opportunity in AI, from making businesses more efficient to being able to provide better customer service.

Specifically in the banking sector, Friot sees the potential for artificial intelligence to help in many ways, including streamlining back-office processes, improving data modeling to help with fraud detection, developing applications with customer service improvements and creating more meaningful and personalized marketing campaigns.

At Community Bank, which has more than 200 branches, including 26 branch offices and a commercial lending location in the Rochester and Finger Lakes region, the banks’ main AI focus right now, Friot says, is augmenting and automating i manual back-office processes to free up time for its 3,000+ employees to be able to perform more meaningful tasks.

The bank is also looking into investments in AI technology for fraud detection and self-service opportunities for those customers who prefer them, and has a robust data analytics department looking into possible AI tools.

I’ve been in the bank for twenty years and I think this [AI] it has the potential to be the most impactful technology I’ve ever seen, Friot said.

Rochester-based ESL Federal Credit Union began taking a closer look in 2018 at how data is stored and structured.

AI needs to be built on solid data, said Jennifer Shoemaker, senior vice president/director of business strategy and analytics for ESL. Over the past few years, we’ve focused on building a strong foundation for our data.

ESL has launched a data warehouse, a large, secure and central repository of business data aggregated from different sources and used to help an organization make decisions, and has also invested in a business intelligence team.

In 2021 the credit union looked at its overall architecture and designed a roadmap of where it is headed in terms of thoughtful and skillful merging of data, processes and people through automation, artificial intelligence and other technologies .

Today we have smaller cases across the organization where AI is being used, Shoemaker said; but, for the most part, the organization is taking its time setting up the right technologies and building the data foundation for AI usage across the organization.

One way ESL uses AI is by updating its learning management system, which contains a library of educational resources for its employees. The goal is to effectively prepare employees to meet the needs of members.

ESL also leverages partners who use AI when appropriate and available, such as in the areas of fraud and detection.

Shoemaker believes that, down the road, the use of AI in banking will be prevalent, and one of its notable benefits will be the freedom for employees to work on higher value-added tasks such as building customer and member relationships.

Rachel Wiener is a Senior Lending Officer at PrimeLending, a PlainsCapital Company, at the Monroe Branch of National Lenders in Rochester. The company helps consumers buy, refinance or renovate homes.

When it comes to AI in the mortgage realm, Wiener believes it’s one more tool in your toolbox, but it must be used with caution, care, and in complete compliance with federal, state, local, and corporate regulations and recommendations.

It’s exciting, but also a little scary, said Wiener, about generative AI. It’s important in our industry to be careful with it and use it as a start and not as an end result.

He currently believes that the most appropriate use of Generative AI is for narrative-type internal tasks such as information aggregation for blogs, newsletters, employee bios, and basic educational social media posts about the mortgage process that don’t include rates or technical information. information.

Our industry is very fast and never stops, said Wiener. We were working all the time. Most of us are numbers; relationship people not necessarily writers. So having a tool like AI to help with more business development efficiently is a game changer.

Wiener points out that any AI-generated information should be audited for compliance and only be used as a springboard for the information, not the final word itself as it can be incorrect, unclear, or distorted.

Indeed, when you use ChatGPT, before you can ask a question, you are met with the following disclaimer: While we have safeguards in place, the system may occasionally generate incorrect or misleading information and produce offensive or biased content. It is not intended to give advice.

Caurie Putnam is a freelance writer from the Rochester area.

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