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Expert opinion: AI in payments – beyond the hype

By Darryl Proctor 4 Dec 2017

A packed, invitation-only event during Sibos, moved the artificial intelligence (AI) in payments debate from theory to reality last month.

The dynamic panel, included payments leaders from Bank of Ireland, Celent and Microsoft as well as an AI specialist (the vice president and chief technologist at Redhat), along with myself. It reviewed the challenges of operating in a new AI environment, not least the need to build collaborative teams who both understand and can apply the technology to real business needs.

Hosted by Temenos, our panel of experts had differing definitions of Artificial Intelligence, but they all agreed that a powerful collection of new technologies was shaping the future of banking. From automation systems freeing bank employees from millions of hours of drudgery, to machines that can detect fraud or even dish out personalized investment advice, the experts saw AI helping banks to improve operations, reduce costs and deliver a better service to clients.

A show of hands from the audience, which consisted of mainly senior representatives from banks with an active innovation strategy, revealed that about half the audience was already working with AI technology in some way. Payments was clearly an area where the benefits of new AI systems were tangible and profound – including greater efficiency, improved customer service, and greater consistency.

Vincent Brennan, head of group payments at Bank of Ireland, said there was a "huge opportunity in customer initiation and accelerating the pace that can be done and processed through the back end of the systems... and the opportunity for improvements from a customer service point of view."

The customer experience was brought up time and again during the discussion. Gareth Lodge, senior analyst for payments at Celent, highlighted that banks needed to be aware of how their customers want to interact – via Siri, for example. Peter Hazou, director of business development, financial services at Microsoft and former MD of BNY Mellon, warned banks that they had to keep up with how digitization was changing client relationships in other industries.

"Banks will become more automated," he said. "This is good news. It's not threatening.

Transformation is the essence. The world is changing and robotics and process engineering will deliver consistent quality, and it's great for people to be freed up to do things other than drudgery." He also touched on Bank of Ireland's experience that once people have been seconded onto AI projects from non-techie roles, they rarely want to go back.

Darryl Proctor, product director - transaction banking at Temenos, anticipated a point where customers will not know when they are interacting with a machine. He cited the example of a machine responding to an email querying a cross-border payment, and doing it so well that the customer was unaware he was dealing with an algorithm. "This is when you start getting to the point when the machine is mimicking how a human would respond to that email," he said.

The crux of the discussion was about...

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ICICI bank in India started with half a dozen RPAs and is now running 500, and on average across those they're getting a 60% time saving.

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