Generative AI, the technology made famous by ChatGPT, will revolutionize the banking landscape.According to McKinsey, generative AI could add $200 billion to $340 billion to the value of banks. per year (9-15% of operating profit). In this article, we look at how banking giant Morgan Stanley started leveraging generative AI and explore the wide range of use cases for generative AI in banking and finance.
Introducing Morgan Stanley's new AI assistant
In 2023, Morgan Stanley launched a new internal AI assistant based on OpenAI's ChatGPT technology. The tool, called AI @ Morgan Stanley Assistant, is designed to help Morgan Stanley financial advisors and support staff access and analyze her more than 100,000 research reports.
Essentially, it's a custom encyclopedia for financial professionals that helps answer questions about investment recommendations, general performance, and even internal processes (such as how to complete a particular application). Think of it as a kind of “co-pilot” that helps Morgan Stanley staff work more efficiently. In fact, generative AI is becoming a co-pilot tool in every industry, not just finance, but healthcare, software development, education, and more.
In a memo to Morgan Stanley staff, co-president Andy Saperstein said the AI assistant will “revolutionize client interactions, bring new efficiencies to advisor work, and ultimately “It helps free up time to do what we do best: serve our customers.”
Generative AI is good at taking conversational prompts and questions, digesting large amounts of information, and coming up with easy-to-understand answers based on what the model has learned. So it makes sense that Morgan Stanley chose to deploy generative AI in this way first. This frees up staff time on research and administrative tasks, allowing them to spend more time with customers. But that's not all. The company is developing more AI tools, including a tool called his Debrief, which is designed to automatically summarize meetings with clients and draft follow-up emails.
Wider use cases and possibilities in banking
Given generative AI’s ability to create content, analyze data, and even run simulations, this technology can help financial institutions make more informed decisions, drive innovation, and better serve their customers. It's very easy to imagine how it can help you provide services.
One obvious use is customer service. Think of a banking chatbot that can answer questions and respond to complaints 24/7. Generative AI can help you onboard new customers in a more efficient way, for example by using tools like ChatGPT to help customers fill out forms correctly and answer questions about switching banks. It's also helpful. In other words, generative AI will create a new era. conversational banking Simulates human conversation. Similar to how we used to do banking.
As in other areas, personalization is a key use case in the banking industry. For example, personalized tools and advice designed to help customers spend their money smarter. Generative AI can provide deep insights into customer behavior and preferences, which can help banks create new and more thoughtfully tailored products and services. Generative AI helps banks create highly customized products and additional services to better serve their customers by simulating how different product and service features meet the needs of individual customers and market segments. will help you create.
Another key use case is automating many of the behind-the-scenes processes and operations in financial institutions, such as performing financial analysis and creating content. This includes creating credit decision models using generative AI, generating user-friendly denial explanations when an application is denied, improving fraud detection frameworks by simulating patterns of fraud, and improving fraud detection frameworks in various markets. May include enhancement and enhancement of asset and portfolio management by simulating asset performance in scenarios. Enhance your risk management practices by simulating operational risk scenarios.
So will other banks get into generative AI as well?
They already do that. British bank NatWest has teamed up with his IBM to power the bank's virtual assistant Cora. Thanks to generative AI, Cora+ will be able to provide a wide range of information to NatWest customers through personalized, conversational interactions.
Square, a financial services platform owned by Block Inc., is embracing generative AI in a very interesting way. We use this technology to provide new tools for content creation, onboarding, and setup for our customers. Among the new features is a menu generator tool that allows restaurants to create menus for their websites in minutes. There is also an AI-powered generative email feature that helps businesses create personalized messages for their customers. There is also a website copy generator that allows you to create headlines, copy, and blog posts for your business website. This shows how banks can use generative AI in the future to create new time-saving tools and products for their business customers.
Elsewhere, global bank HSBC has reportedly unearthed “hundreds” of use cases for generative AI that it could potentially deploy.
In other words, banking companies have been transforming into technology companies in recent years. Generative AI takes this transformation to a whole new level, giving banks new ways to streamline processes and better serve their customers. It is safe to say that financial institutions that do not implement generative AI risk being left behind.