Techopedia | Finance and Banking Go All In With AI — But Customers Aren’t So Sure
By Ray Fernandez, Senior Technology Journalist
If you worry about your banking accounts more than any other online service, especially in the artificial intelligence era, you are not alone — and making a wise move.
Users want to step lightly, with 6 out of 10 American users thinking AI in finance is a double-edged sword, but banks are keen to explore technology.
With fraud and financial scams hitting all-time highs — costing banks and finance billions of dollars globally every year — Techopedia sat with experts in the field to understand the misalignment between the industry and its customers as AI sweeps across the sector, transforming it forever.
60% of Americans Say AI In Finance Is A Double-Edge Sword
On June 6, Glassbox, a provider of AI-driven customer intelligence solutions, released “The State of Digital Banking 2024” report. The report found that more than half of those surveyed say security is an extreme priority for digital banking.
The report says that 60% of U.S. consumers say AI in banking is equal parts benefit and risk. Despite these concerning findings, the industry is not slowing down in its AI revolution.
In Early 2023, Sam Altman, CEO of OpenAI, said that 92% of Fortune 500 companies already used OpenAI products. Industry executives at the 2024 MIT FinTech conference, all agreed that there is a rapid pace of adoption of AI in the financial sector.
The industry sees generative AI as an inevitable asset that provides value. Jose Lopez, vice president of global AI and data innovation at Visa, spoke at the event about the issue.
“AI is basically top of mind for everybody. It’s been a few months of transition and very rapid acceleration.”
While implementation has been fast, with AI deployed by finance in a wide range of areas, from anti-fraud to financial service customer-centered personalization and more, customers are not entirely convinced about the modernization plan.
Consumers recognize AI’s security potential but 47% still say security risks are the main risk with AI in banking.
While 67% appreciate personalization based on their banking history, they are not comfortable with AI being used to auto-populate personal information based on past engagements.
AI, Financial Inclusion, and Regulations
Ravi Nemalikanti, Chief Product and Technology Officer at Abrigo, a banking software and consulting company, told Techopedia that caution and a measured approach are essential when adopting new technology, especially in the highly regulated banking and finance industry.
“While megabanks like Chase Bank lead in adopting new technology, regulatory challenges remain significant.”
Finance and banking are among the most regulated sectors in the world, with all businesses, large or small, required to meet the same standards and compliance levels. While some argue that AI will further democratize access and drive financial inclusion, Nemalikanti from Abrigo explained that this is not always the case.
“There are over 9000 banks and credit unions representing small businesses and commercial customers who are cautious and lack the resources to navigate regulatory complexities while meeting customer expectations.”
For these institutions, innovation often depends on their slower-evolving partner landscape.
To see the full article featuring Abrigo, visit Techopedia “Finance and Banking Go All In With AI — But Customers Aren’t So Sure.”
