By Sam Everington, CEO
Money 20/20’s tagline has an optimistic energy. And after my recent trip to FinTech’s biggest European convention, I’m certainly feeling positive.
With over 8000 attendees, 90 countries represented, and 350 speakers, everyone who’s someone in money is found here: all prepared to get into the nitty-gritty of what the financial ecosystem has in store over the coming year.
Overall, I was thrilled to attend, and had some great conversations with experts from across the industry – many of which focused on the big hype topic of the moment: Generative AI.
Generative artificial intelligence (AI) is the name for algorithms that can be used to create new content, including images, text, and videos. Recent breakthroughs in the field – such as the explosion of ChatGPT – have the potential to disrupt a lot of industries.
Machine learning capabilities are already cropping up in the banking industry, predominantly as a way to automate repetitive tasks. As the new kid on the block, Generative AI has yet to take hold – but voices across the industry are busy speculating about how it can be used in banking at this point, it could be used to fulfil a range of use cases, including:
Sounds promising. Exciting even. But how realistic is this outcome? And more to the point, is this actually what the industry should be focusing on?
Let’s take a minute to talk about ‘tech bubbles’.
Defined as ‘bad information environments’ , a tech bubble refers to hype around an emerging solution. This may trigger pressure to invest early to gain an advantage over competitors, and can be exacerbated by economic uncertainty when executives are unsure about where to cut costs, and where to invest more.
But sometimes, the early promises and claims don’t pan out, and the bubble bursts – leaving businesses and investors high and dry.
Of course, Generative AI is already making waves in other industries, and so it’s not unreasonable to ponder how it could make a difference in banking. But there’s a real risk that focusing too much on the next-big-thing means we don’t tackle the issues that are really pressing in the world of accounts, loans and payments.
Instead of getting caught up in the moment, there’s a real need for banks to take a step back and consider what’s really important – and crucially, where they should actually be investing right now.
The truth is that most banks are nowhere near running a digitally native operation. In fact, many banks are entirely constrained by legacy back-end systems, most of which were built decades ago. When you’re working in that sort of environment, meaningful innovation becomes almost impossible.
Ultimately, focusing on core improvements is a much more worthwhile approach than waxing lyrical over tech that hasn’t yet proven its worth. What banks really need is action on getting the basics right. Like having the flexibility and agility to launch new financial products quickly – or even improving how service agents can view and manage customer accounts.
It doesn’t hurt to keep Generative AI in the back of our minds, but for most, getting your house in order should be top of the agenda.
Engine’s mission is to help banks, FinTechs, and corporates from around the world build better banking experiences, quickly. Our pioneering platform is tried and tested, having powered Starling: a digital bank with the highest and most consistent customer satisfaction scores in the UK market.
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