Learning to balance AI usage with human instinct

You may have seen a curious picture making its way around the internet recently of Pope Francis in a puffy white winter coat. I recall seeing it for the first time and being amused. I didn’t question its authenticity — it looks absolutely true to life, even though the bright white coat is an absurd combination of the Stay-Puft and Michelin men. It turns out the image is a fake, created by a tech startup developing artificial intelligence that can create images that look entirely real. We’re beyond the capabilities of Photoshop. We’ve entered an era where AI is so powerful and convincing we must stay on guard to avoid being duped. This is not going to be easy. 

AI is already impacting the banking world, and its influence is about to grow. I’ve written in this space previously about what banks should consider if their website is to offer customers a chatbot to handle simple requests (golden rule: always let customers know in no uncertain terms they are talking to a robot). I’ve also covered a few tech startups that market data analysis software for banks as straight up AI. Along the way, a question has occurred to me: What is actual AI and what isn’t? As we enter a brave new world of advanced AI, does a spreadsheet adding up totals to be distributed at the board meeting count anymore when we’re on the cusp of seeing actual human bankers and all sorts of bank jobs potentially being replaced by robots? 

It’s not far-fetched, and banking is a profession I’ve more than once seen included on lists of white collar work ripe to be replaced by AI. Try not to be insulted. Again, these robots are nearing the point of being more brilliant at many things than us mere mortals. 

Community banks, however, might find themselves in the position of not having to try to keep up with the big banks when it comes to tech this time. In writing this column I’ve come to learn it’s foolish to make too many predictions, but here it goes: Community banks will once again stand out in the business and retail financial fields by still offering services provided by actual human beings in communities shared by bankers and customers alike. Yes, the lowly website chatbot may be necessary to stay competitive and keep more entry level employment costs down a bit. But reading about big banks chomping at the bit to deploy AI in every space to save a few bucks is an opportunity for community banks to double down on their most resilient attribute: Actually caring about the well-being of their customers and communities. It would be a mistake to water down this reputation in the interest of raw efficiency just for efficiency’s sake. 

Community banks cannot have their AI cake and … eat it too? They will still benefit from where AI is very useful, i.e. behind the scenes. AI is becoming a very powerful tool in wealth planning. Financial planners can use it to model very specific scenarios and use these potential economic outcomes to make better investments. Fraudsters have been using AI to crack passwords and the like for years, but having AI on your bank’s team when it comes to detecting fraud will only get better. Community bankers can also keep their high-touch brand while using AI to customize marketing to individual customers. 

Where AI is lacking, community banks already fill the void. We’re learning it isn’t the best at making loan decisions. It’s useful as a data research tool, but when you know your customers, there is a sixth sense the best bankers employ that AI is far from mimicking. AI also struggles to predict markets. Robots still don’t like unpredictability. Think of Captain Chesley “Sully” Sullenberger, the pilot who famously landed a plane on the Hudson River against the more data-driven instructions given to him from the tower to turn the plane around. With 20,000 flight hours behind him, he processed the scenario with his finely tuned human instincts, and everyone on board lived to tell the tale. 

If you prefer a more sci-fi analogy, remember that Luke Skywalker turned off R2-D2 when it came time to take the one-in-a-million shot that blew up the Death Star. AI will only get more powerful and reach into more avenues of our lives. Community banks won’t get swallowed up in this unfolding history if they remember to keep using The Force.