Big tech companies are betting that a new wave of smaller, more precise AI models will be more effective when it comes to the needs of companies in sectors like law, finance and healthcare.
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LONDON – Many financial services companies are increasingly touting the benefits of artificial intelligence when it comes to enhancing productivity and overall operational efficiency.
Despite bold statements, too many companies are failing to deliver tangible results, according to Edward J. Achtner, head of generative AI for the UK banking giant. HSBC.
“Frankly, there are a lot of success plays,” Achtner said on a panel at the CogX Global Leadership Summit alongside Ranil Botejo — a fellow AI leader at rival British bank Lloyds Banking Group — and Natalie Ostmann, president of NV Ltd, a leading In the field of artificial intelligence. A consulting firm for venture capital funds.
“We have to be very clinical about what we choose to do, and where we choose to do it,” Atchner told attendees at the event at London's Royal Albert Hall earlier this week.
Achtner explained how the 150-year-old lending institution has embraced AI since ChatGPT — the popular AI-powered chatbot from MicrosoftThe OpenAI-backed startup came on the scene in November 2022.
HSBC's AI lead said the bank has more than 550 use cases across its business lines and functions linked to AI – from combating money laundering and fraud with machine learning tools to supporting knowledge workers with state-of-the-art AI systems.
One example he gave was the partnership HSBC has with the online search giant Google Regarding the use of artificial intelligence technology in combating money laundering and mitigating the effects of fraud. He added that this connection has been in place for several years. The bank has also been dipping its toes deeper into genAI technology recently.
“When it comes to generative AI, we need to clearly separate that” from other types of AI, Achtner said. “We approach fundamental risks in relation to generative risks very differently, because even though they represent incredible potential opportunities and productivity gains, they also represent a different kind of risk.”
Achtner's comments come as other figures in the financial services sector — particularly leaders at startups — have made bold statements about the level of overall efficiency gains and cost reductions they are seeing as a result of investments in AI.
Buy now, pay later Klarna says it is leveraging artificial intelligence to compensate for the loss of productivity caused by a reduction in its workforce as employees move on from the company.
It is implementing a company-wide hiring freeze and reducing total headcount to 3,800 from 5,000 — roughly 24% of the workforce — with the help of artificial intelligence, CEO Sebastian Siemiatkowski said in August. He is looking to reduce Klarna's headcount further to 2,000 employees – without setting a time limit for that target.
Klarna's president said the company is reducing its overall headcount against the backdrop of the potential for artificial intelligence to have a “significant impact” on jobs and society.
“I think politicians today really have to think about whether there are other alternatives to how to support people who might be effective,” he said at the time in an interview with the BBC. Siemiatkovsky said it is “too simplistic” to say that the disruptive effects of AI will be offset by the creation of new jobs thanks to AI.
Ostman of NV Ltd, a London-based firm that advises the C-suite of venture capital and private equity firms, directly addressed Klarna's actions, saying that headlines about AI workforce cuts are “not helpful.”
She suggested that Klarna likely saw AI as “making it a more valuable company” and therefore incorporated the technology as part of plans to reduce its workforce anyway.
A Klarna spokesperson told CNBC that the result Klarna is seeing from the AI is “very real.” “We are publishing these findings because we want to be honest and transparent about the real-world impact of genAI on companies today,” the spokesperson added.
“Ultimately, as long as people are ‘properly trained’ and banks and other financial services companies are able to ‘reinvent’ themselves in the new AI era, that will help us evolve,” Ostman added. She advised financial companies to pursue “continuous learning in everything they do.”
“Make sure you try these tools, make sure you make this part of your daily life, and make sure you're curious,” she added.
Bottejo, Lloyds' chief data and analytics officer, pointed to three main use cases the lender sees for AI: automation of back-office functions such as programming and engineering documentation, “human-in-the-loop” uses such as claims for sales staff, and AI-generated responses to customer inquiries.
Bottego stressed that Lloyds is “moving cautiously” when it comes to exposing the bank's clients to generative AI tools. “We want to put our guardrails in place before we actually start scaling it up,” he added.
“Banks in particular have been using AI and machine learning for about 15 or 20 years,” Bottego said, noting that machine learning, intelligent automation and chatbots are things that traditional lenders have been “doing for a while.”
Generative AI, on the other hand, is a more modern technology, according to the Lloyds exec. The bank is increasingly thinking about how to scale this technology — but by “using existing frameworks and infrastructure that we have,” rather than moving the needle dramatically.
Boteju and Achtner's comments are consistent 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 was unlikely to be as disruptive as companies like Klarna suggest in their public messaging.
“We see the same potential they see,” Yilmaz said in an interview in London. “It's just the tone of communication is a little different.” He added that ING uses AI primarily in its global contact centers and internally for software engineering.
“We don't need to be seen as an AI bank,” Yilmaz said, adding that with many processes, lenders won't even need AI to solve certain problems. “It's a really powerful tool. It's very disruptive. But we don't necessarily have to say we put it as a sauce on all foods.”
Johan Tjarnberg, CEO of Swedish online payments company Trustly, told CNBC earlier this week that AI “is actually going to be one of the biggest technology tools in payments.” However, he noted that the company is focusing more on “AI fundamentals” than on transformational changes such as AI-led customer service.
One area where Trustly is looking to improve customer experience with AI is subscriptions. The startup is working on an “intelligent charging mechanism” that aims to figure out the best time for a bank to receive payments from a subscription platform user, based on their historical financial activity.
Tjarnberg added that Trustly is seeing a 5-10% improvement in efficiency as a result of implementing AI within its organization.
