The Generative AI Impact on Financial Services Companies

By John B. Lewis, Vice President, Business Solutions. The use of artificial intelligence is not at all new for financial services. For over 30 years, banks have relied on predictive AI tools like FICO® Falcon® Fraud Manager, which assesses if a payment is likely to be fraudulent, and tools to recommend the right product or service for a customer.

Though the full scope of the impact of AI on financial services is yet to be seen.

Most of the excitement around Generative AI lies in creating marketing content or handling customer requests. But what’s getting lost is the real opportunity: Generative AI is transforming how financial services companies synchronize their data stores, automate their marketing operations, and address risk management.

Synchronizing Data Stores

One of the most pressing challenges in financial services is managing vast amounts of data spread across multiple, often disparate, systems. This fragmentation is often the reason financial services companies look to select a new Customer Data Platform (CDP) or marketing automation platform.

Generative AI is already paying huge dividends in this area. A generative AI Agent is a model built for a specific task, acting as a subject matter expert (SME) in that topic. Built into the Zeta Marketing Platform is an Agent Builder that allows clients to create their Large Language Model (LLM) Agents already trained on how the platform operates.

Together with our clients, we use specific agents to generate business requirements documents as part of the onboarding process. When ingesting data, the natural language capabilities of ZOE (Zeta Opportunity Explorer), our AI assistant, makes it easy to generate specific queries to extract, transform, and load data sources into the platform. It boosts our data flows capability to handle edge data cases and specific financial services data needs much faster than previous solutions.

Generative AI also processes unstructured business documents, such as a business loan application with its associated supplemental documents (financial statements, business plans, tax documents, etc.), bringing new insights and richer data for decisions and messaging.

These new tools save time, resources, and reduce execution risk while upholding complex financial services data hygiene requirements.

Automating Marketing Operations with AI

For years, we have used predictive AI tools to determine who gets what product message or offer when (Primetime), and how (best channel). Generative AI expands this capability by actually developing copy, visuals, and code for messages. While Chief Marketing Officers may not fully create campaigns without human creative input, Generative AI is vaporizing a significant amount of the drudgery associated with campaign execution.

 For example, clients moving to Zeta from a competitor often must deal with converting proprietary scripting languages to our open-source Liquid script. Though our tools can convert hundreds of templates to our platform in minutes.

For clients using Photoshop, we have tools that ingest PSD files and output responsive HTML email templates or generate images for display campaigns from email messages.  These tools are here now, and they are reducing the cost of executing marketing campaigns.

These point solutions are useful, but the real value is when intelligent agents automate the workflow process, enabling marketers to chain together various tools across vendors, simplifying the human part of the marketing campaign process.  That is the promise of our Gen AI Workflows tool (currently in beta), which is already saving thousands of hours per year.

Risk Management in Financial Services

Generative AI has the potential to deliver new tools that better mitigate risk while creating a whole new set of challenges. Who says risk management is not fun?

First, the good news: Generative AI LLM tools can automate compliance work, such as filing Suspicious Activity Reports for regulators. Fraud detection tools are dramatically improving, with HSBC detecting 2 to 4 times more confirmed suspicious activity and demonstrating a 60% decline in false positives. MasterCard’s Decision Intelligence Pro similarly boosts fraud detection rates by 20% and reduces false positives by more than 85%. These AI-based improvements allow risk managers to focus investigation time on high-risk, actionable alerts.

Now for the challenges. Sunny Bedi, CIO of Snowflake, in the Data + AI Predictions 2024 report, says, “Generative AI will increase the trend toward centralized data on a managed service platform that provides the security and governance you need and creates a single source of truth for LLMs and everything else.”

However, this push to the cloud will complicate the security and compliance strategy, especially with companies distributing data and models across many platforms with different security and governance capabilities. Further, the power and data processing requirements of Generative AI are leading to consolidation to fewer providers of LLMs.

While Generative AI tools might make it easier to switch CDPs or marketing automation tools, it is creating a dependency on a small number of tech companies for storage and LLMs.  While it is unlikely that U.S. banking agencies will act in the near term, expect European Union regulators will take action. Last year, Britain proposed rules to regulate financial firms’ heavy reliance on external technology companies. Regulators are worried that problems at a single cloud computing company could potentially bring down services across many financial institutions.

AI in Banking and Finance: A New Era of Efficiency

The adoption of Generative AI tools is enabling financial institutions to become more efficient, flexible, and more resilient.  However, success requires more than embracing Generative AI tools, it requires a disciplined approach that incorporates rigorous quality assurance checking, documentation of explainability, thoughtful vendor management, and more.

But with tools like ZOE, financial services firms can realize the benefits of Gen AI in a secure manner. Learn more about our Generative AI tools in the Zeta Marketing Platform.