Everyday AI Podcast – An AI and ChatGPT Podcast - EP 61: Using AI to Improve Banking and Financial Services

Episode Date: July 19, 2023

We know that AI can help us make more money. But what can it do to help improve the way we manage and deal with money? Today, Nazia Raoof, IT Strategy and Strategic Partnerships for Financial Services,  joins us as we delve into the world of banking and financial services and explore how AI can be used to improve these industries.Newsletter: Sign-up for our free daily newsletterMore on this: Episode PageMore on this topic in today's newsletterJoin the discussion: Ask Nazia and Jordan questions about AI and financial services Upcoming Episodes: Check out the upcoming Everyday AI Livestream lineupWebsite: YourEverydayAI.comEmail The Show: [e-mail] with Jordan on LinkedInTime Stamps:[00:00:17] Daily AI news[00:06:35] ChatGPT as a complementary tool for financial advisors[00:09:15] Firms adapting to AI and use cases[00:14:33] Embedding  AI in platforms and APIs while adding guardrails[00:16:47] Generative AI's risk for financial institutions' security[00:19:53] Final takeaway Topics Covered in This Episode:- Risks posed to financial institutions and how banks handle AI- Implementation of AI governance committee- Functions of the committee in evaluating and implementing AI- Understanding of decision makers in the financial industry regarding generative AI- Extracting information from PDFs and spreadsheets using generative AI- Importance of adapting to using bots in the financial industry- Personalized advice and financial education offered by bots- Use of bots in websites for loan assistance and account support- Guideline establishment and embracing the use of bots by banks- Use of embedded AI and chat GPT in platforms APIs and partnerships- Focus on implementing guardrails to protect against data breaches- Accuracy and limitations of ChatGPT requiring fact-checking- Risk of younger generations relying on AI-generated code without understanding its quality- JPMorgan's use of ChatGPT and AI in production- Development of JPMorgan's platform called Index GPT for investment selectionKeywords:ChatGPT, generative AI, connections, voice cloning, impersonation, security, financial sector, risks, financial institutions, AI governance committee, ethical uses of AI, education, evaluation, decision making, prioritizing, implementation, understanding, power, potential, extraction, PDFs, spreadsheets, availability, bots, personalized advice, financial education, websites, loan assistance, account support, guidelines, embedded AI, platforms, APIs, strategic partnerships, data breaches, sensitive information, accuracy, fact-checking, verification, younger generations, AI-generated code, JPMorgan, production, investment selection, robo advisors, complementary tool, information security, analysis of large data sets, access to information, technology leader, business problems, process automation, strategy, delivery, Eliza, communication between humans and computers, pattern matching, sSend Everyday AI and Jordan a text message. (We can't reply back unless you leave contact info)

This is the Everyday AI Show, the Everyday Podcast where we simplify AI and bring its power to your fingertips. Listen daily for practical advice to boost your career, business, and everyday life. Meet Firefly AI Assistant, now live in Adobe Firefly, the All In One Creative AI Studio. Just describe what you want to create and the assistant handles the rest, orchestrating multi-step workflows across Photoshop, Premiere Express, and more in one conversational interface. You direct the outcome. The assistant accelerates execution. Will generative AI ever make its way into banking and financial services?

We're going to find that out today. All right. My name is Jordan Wilson. Welcome to Everyday AI. This is your daily live stream podcast, free newsletter, helping everyday people like you and me, not just learn about AI, but how we can actually leverage it. There's always so many new tools. so many new techniques, so much always going on in the world of AI.

And that's what this show is for. It's to help all of us make sense of it, make use of it. So as a reminder, if you're joining us live, thank you. Welcome. Please drop us a comment for either myself or our guest today where we're going to be talking, like I said, about AI and the financial systems. But before we do, let's talk about what's going on in the world of AI news, because there's some new developments.

So actually, Stephen, good morning and welcome Shri from Indonesia. Thanks for joining us. All right. So probably the biggest headline of the day, Meta and Microsoft having a partnership on Lama 2 and making it open source. That's actually a really big deal. So there will be a lot more on this in the newsletter. But essentially, META has been working a lot on some of their generative AI models behind

the scenes. And Lama 2 is probably the... their biggest one, and they are teaming up with Microsoft to make this open source. So huge, huge news, kind of on the AI chat in the large language model base right there. Next, but not least, or sorry, next, we have Bing Chat has released their Enterprise Edition. So Microsoft as well, just making all of the headlines in the last 24 hours. So they're obviously introducing BingChat enterprise aimed at, you know, those companies that may not be wanting to share their data. So they're one of the biggest things that they're touting is the being able to protect your

data when you are uploading it into BingChat. So we will see how that's received. But if the markets are any indicator, Microsoft stock soar to an all-time high kind of shortly after this announcement. All right. last news piece of the day, a new article in Fortune kind of looked at how Elon Musk is approaching his new AI company, XAI. So he did all out say that he is going after creating artificial general intelligence, but an AGI that's as smart as a human and to be maximally curious and

truth seeking. All right. So we have more on those stories and a bunch of other good insights. Today in our daily newsletter, we try to get that out around 11 a.m. Central Standard Time. So it's free. Make sure to go to Your Everyday AI.com to read more about those stories. So as we bring on our guests, thank you for everyone else joining us. Rastafat, good morning, checking in from Atlanta. George Strom, what's going on? Thanks for joining us. All right.

So let's talk AI in the financial services. It's something I'm always curious about why that sector isn't picking up AI. as quickly as the rest. So let's bring on our guests and let's talk about this. So, welcome to the show. We have Nazia Raouf, who works as a technology leader in financial services. Nassia, thank you for joining us. Yeah, absolutely. Good morning, Jordan. Thank you for the intro. I'm really happy to be here. All right. I'm excited to talk, you know, just AI in financial services. But before we do, just give everyone maybe a brief background on kind of your work and your experience. in this field.

Yeah, absolutely. So to give you some context, I'm a technology leader in financial services with a focus on solving business problems with technology. So things like process automation, business transformation, and leveraging new technologies to drive business growth. And I've been on both the strategy site as well as the delivery side. And I'll talk a little bit about my early exposure to AI. So earlier on in my career, I was actually focused on more handsawed roles.

and then I made a pivot into more leadership roles and financial services. So my first exposure to AI was actually in college with a program called Eliza, and some people may be able to relate with Eliza. Eliza was actually created in the 60s, not that I went to college in the 60s, but Eliza was actually created in the 60s by Weisenbaum. And it was intended to explore communication between humans and computers, and he was exploring this idea of therapy, therapist online using Eliza. So Eliza simulated conversations with you with pattern matching and substitution

methodology. And that gave the users an illusion that they were actually talking to somebody. So as an example, if you said, you know, how do you feel about your mother or something like that, it would pattern match and say, you know, well, tell me more about your mother or something like that. but if it didn't recognize the pattern, it would just say, tell me more. And anyway, back in college, I still knew I was a little smarter than Eliza. Oh, it's so good. It's funny because, you know, now you have, you know, the kids, as I say, you know, they're talking with their Snapchat AI and, you know, people are obviously talking with,

you know, chat GPT. But yeah, most people don't know about Eliza and the history of chatbots. It's been around for decades. But speaking of that, AI also isn't new to the financial services, right? So it's been used in many, many use cases, you know, deep learning, machine learning since the 80s and even before. So, you know, why do you think, you know, given that the banking and the financial sector has been using different forms of AI for decades, why is generative AI, you know, your text to text kind of like your chat GPT, all these other text to blank generative AI models, why are they not being used right now, do you think, in financial and banking service? I wouldn't say they're not being used at all. You know, if you fast forward to 2023, like we saw chat GPT as the next disruption, right? But there are firms like J.P. Morgan that are using it very

well. So, you know, I read on the news, J.P. Morgan is using 300 use cases in production, 300 AI use cases in production. So that's a lot. And they're also working on this platform called Index GPT, and that seems to be revolutionizing investment selection for customers. So if you think about, you know, a couple of decades ago, there was robo advisors, and that was kind of the big uproar, oh, it's going to replace financial advisors and whatnot. And once they started exploring it, you know, there are a lot of platforms like Morgan Stanley, Bank of America, Schwab, they all have the robo advisory platform, but it didn't replace financial advisors.

is actually complemented them. So it was more of a complementary tool. And I think more firms need to see Chad GPT as a complementary tool instead of a replacement, right? And the other risk that I also see from a financial service firm perspective is the information security. That's huge. And, you know, in a lot of initiatives over the decades in financial services, it was, it was information security that was advising as like, okay, you know, where we can have data breaches,

you know, somebody can, you know, accidentally expose this data, so on and so forth. So I think it, you know, we need to explore it from information security perspective as well. Okay, what's security features are we enabling so people can use it more safely? Yeah, that's a great point because in the end, it is all about security features. Right. I'd say the maybe the two industries that the everyday person kind of, you know, finds themselves interacting with that generative AI is still not as commonplace as others as, you know, medical and then maybe financial services. So what do you think are the biggest kind of hurdles for this technology to be more commonplace in the financial and in banking sectors?

Or I guess, does it even need to be? Like, do we need to? to be able to go on to, you know, Chase.com or our 401Ks and to be able to, you know, kind of, you talked about robo advisors, like, should we even be able to go on there and have a chat with our 401K and to make decisions that way? What are your thoughts on that? Absolutely. And I think if there are firms that are adapting it and then there are other firms that are fighting it, the firms who are fighting it may be left behind, right? Because then there are firms offering more personalized advice and things like that. So I've seen some of the websites already using it. So things like loan assistance or financial education. So let's take financial

education for a second. I mean, the bod was actually very sophisticated in terms of educating you from a financial perspective. Okay, you know, what do you have a question on? And then it would give you details. And then, you know, some people don't feel comfortable asking those, you know, basic questions. So this is kind of a way to educate them. There are so many other use cases like account support, you know, you would be on the phone with customer service or what have you for hours. And this way, you can get that account support at the tip of your fingers. So there are so many use cases. I feel like you need to, banks need to figure out the guardrails and kind of move forward there. Yeah. I think you just mentioned something. That's probably a pain point for so many of us,

myself included, right? So when you are, you know, calling into your bank or sometimes, you know, financial advisor or whatever it may be, you're hit with those automated prompts. And it seems like those haven't changed very much in the last 10, 15 years, right? You're still trying to get a human on or they're trying to recognize your voice. So it sounds like you see that sort of technology improving in the near future, correct? Absolutely. And one of the ways, that I've figured out for one of the firms that I'm working with is having an AI governance committee. So the idea of an AI governance committee is, you know, there are a couple of things. So one is the ethical uses of AI, whether it's at financial firms or anywhere else.

I feel like that's a big topic also. So the idea of having the AI governance committee is one to educate the users, not just, you know, the heads of departments, but also other users. because we're constantly getting new ideas, hey, we can do this, we can do that. And we don't want to just shoot them down. We want to evaluate them and see, okay, how can we improve this, right? And some of the other functions are decision-making, prioritizing, and really looking at how we can bring them on in a safe and strategic way. Sure.

What's been your thoughts so far? So maybe thinking outside of your official role on these projects. are people in decision makers in these financial industries, are they understanding the, I guess, the power and potential of generative AI? And maybe for those of you listening, just as an example, and we've done videos of this, and I'm actually speaking at a summit tomorrow, kind of on this thing, but the ability to upload a PDF with hundreds of pages

and to be able to pull out stats from it, or uploading a spreadsheet with millions of data points and to be able to talk to that spreadsheet and grab out the most important information. Would you say that decision makers in the financial and banking industry are well aware of how readily available this technology is? Sorry, just give me one second. Sure. Right back.

Sure, no worries. All right. So as Nazia kind of takes care of something going on there. So I think it's interesting some of the things that she said because we're talking about how accessible that all of this technology is. And definitely make sure to check out the newsletter today because we will reference some of these things that I've talked about, the ability to literally look at millions of data points in a spreadsheet, the ability to chat with, you know, PDS, all those things.

I think that there's a lot of great use cases for this technology as we look, when and if it's going to be rolled out to your bank or your financial advisor or whatever it may be. So I just wanted to highlight a couple comments here that are coming in. So Matthew, thank you for joining us, just talking about security is paramount now for sure, especially. Yes, that's extremely important. Also, Yaddy talking about in finance, we definitely know the power of AI, but our usage may be totally different because our AI is a back-in thing dealing with security. Absolutely.

So let's actually ask Nuzzi about that. So, you know, kind of even what Yadhi was talking about here in the comment. So thank you for that. Talking about the power of AI and our usage as consumers is maybe a little bit different than how the banks and the financial systems might be using AI, right? How do you see even just generative AI? and kind of the kind of like quote unquote future of it, how is that going to change thing for the average consumer, you know, being able to get information from their bank, from their financial

system? So I think one of the things that I've also seen and I see, you know, in terms of the future where things are going, is embedded AI. So even though we're not being so hesitant in using chat GPT on its own, I'm seeing chat GPT embedded in either platforms, APIs, and also strategic partnerships with startups. So that's where I see things going. So, you know, one of the things we were talking about financial education or customer account information.

So what we want to do is basically implement it in a platform. So there are guardrails. So one of the biggest risks that, you know, risk and information security team see is data breaches and whatnot. So basically putting guardrails in to see, okay, if you see people sharing social security numbers, you know, let's stop it there, right? Let's, if you see, you know, the addresses and stuff like that, sensitive information being shared, let's block it, right? So there are guardrails there. Whereas if you use chat GPT now, I can take, you know, documents, like personal documents, say, summarize this, which you should not be doing, right, because it's still in the initial

stages. So that's one. And then two, in terms of accuracy, it's still not there, right? You know, I was creating a strategy the other day and I said, okay, research this topic or what have you. And I thought it would save some time, but I still had to fact check it. So I don't know how much time it actually saved, but it's good. It's, you know, summarizing information. Where I see one of the risks is, you know, my niece is coding now. So she's like, oh, yeah, and she's much younger. So she said, oh, I'm using this platform and it gave me this code. But she doesn't know the difference between good code and bad code. So that's, again, a big risk, right?

That's where companies are seeing it as a big risk. Because if you're experienced, like I can look at, I can still look, you know, decades later, I can still look at a block of code and we're like, okay, this is what it does. But, you know, the younger generation who is still learning, they need to learn before they start just ask prompting chat GPT to give them code. Yeah, yeah, absolutely. I've talked about this in previous episodes, and this is probably beside the point, but I agree because actually chat GPT and generative AI actually makes it so easy to learn that I think sometimes our brain doesn't even make those connections. But Nassia,

one thing I did want to ask you about, you know, you talked about, you know, kind of the guardrails in place and in risk and security, which I think when it comes to the financial sector is a huge, huge issue, right? Because we've all seen stories, especially, I mean, we don't even talk about things like voice cloning a lot on this show, but it's so, it's so, you know, easy now to do, you know, to clone someone's voice or to act as someone else. So what's your, what's your thoughts on how that may impact, you know, security at banking? So, you know, being able to, whether it's someone's voice or to create videos of someone, you know, clone people's voices, what risk does that pose to financial institutions because it seems like that would be for bad intent and bad

purposes. It would probably normally be to go after someone's financial. So how do banks deal with that? So, you know, there are a lot of platforms that kind of screen for that, but there's still, I feel like people are still getting creative in terms of how to bypass some of the security measures. And I think that's where, you know, banks can leverage AI to get ahead of it, right, to say, okay, you know, okay, here's the identification that they presented.

Let's ask for something else. Like they would ask for something that you wouldn't know. Like, you know, something from the records. Give me like a recurring transaction. Actually, that's pretty basic. But something else where it's very unique where AI wouldn't know, where a person, random person, wouldn't know. So I think they have to get creative in that sense because fraud has increased a lot.

And I don't have the stats. on that, but it has increased a lot when chat GPT was introduced. So if they leverage AI, then it's almost like a level playing field where it's like, okay, people are leveraging AI for not good use cases. And so banks need to start using AI to kind of combat them. Yeah. It's yeah, it is, it is funny, you know, people using AI to combat AI. It's a, it's a strange world we live in now, but that's, I think that's the reality of it. So real quick, just to kind of wrap up our conversation here because we've gone all over the place and I think it's been very valuable. But moving forward, how do you see, you know, AI and its accessibility,

especially, right? And how fast things are changing and how much, you know, really just added benefits that companies can have from adopting to it. How do you see this changing in the near future, changing banking, changing financial institutions with the kind of nonstop reinvention of generative AI technology. How is it going to affect your sector? So I think we're still in the initial stages, but just like I had given you as an example of like robot advisors, right? It's like everybody was kind of afraid of it and then they just kind of adapted it, you know, accepted it. So I see chat GPT as a complement to it instead of a replacement to certain things. And I think it's only going to get better, faster, and more efficient. So it's just about time on figuring out what guardrails can we have

in place and really just adapt the technologies. All right. Well, thank you again, Nasea, for joining us. And as a reminder, if you are tuning in and listening and you wanted to know more about what Nasea was talking about, don't worry. We're going to recap it all in our daily newsletter. But Nuzia, thank you so much for joining us. All right. Thanks for having me. All right. And just as a reminder, everyone, please go to your EverydayAI.com. Sign it for the daily newsletter. And if you are watching or listening on a podcast, please drop us a rating, Spotify, Apple.

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