Transforming the banking experience with generative AI
As the behind-the-scenes processes in banks change with the use of new technology, find out how OCBC is using generative AI to build the bank of tomorrow
Lee Kim Siang
ARTIFICIAL INTELLIGENCE (AI) has rapidly emerged as a transformative force across multiple sectors, revolutionising how businesses operate and interact with their customers.
Within the banking sector, AI has significantly reshaped customer service and operational efficiency. The recent emergence of generative AI (GenAI), a subset of AI that can create content and generate human-like text, has further enhanced these changes.
The research arm of consultancy McKinsey estimates that GenAI can add between US$200 billion and US$340 billion in value to the global banking sector every year through increased productivity. This translates to an increase in revenue of between 2.8 and 4.7 per cent.
The use of GenAI will go far beyond contributing to the bottom line. It could also enhance customer satisfaction, improve decision-making and employee experience, and decrease risks through better monitoring of fraud and risks.
This is why OCBC has been one of the early adopters of AI among Singapore banks and is currently riding the wave of GenAI.
The AI journey at OCBC
The bank first set up its AI Lab unit in 2018 and extensively uses AI across three areas: generating revenue, improving productivity, and reducing banking risks. Today, the AI unit has expanded multifold, and is known as the group data office.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
From personalising credit card deals for customers to detecting fraud, AI has become embedded in OCBC’s day-to-day operations.
But with AI technology making great strides in recent years, so has OCBC, which has intensified its focus on employing GenAI in its internal operations in the last 18 months.
It was the first Singapore bank to roll out a GenAI chatbot, OCBC GPT, in November last year. The chatbot assists the bank’s 30,000 employees globally with writing, research and ideation.
Donald MacDonald, head of group data office at OCBC, says that while traditional AI is focused on rational decision-making, GenAI focuses on creativity.
In this regard, GenAI is “transformational”, says MacDonald. In the past, every problem statement would require OCBC to build separate AI models using traditional AI. For example, the bank would have to build three models to generate, document and conduct unit tests for computer coders when helping businesses solve problems.
GenAI, however, requires only one language model to execute all three tasks.
“The models are also very good at what we call zero-shot learning, which is the ability to solve a task without being trained specifically how to do it. These models allow us to build things much, much faster than we could in the past,” says MacDonald.
But the biggest benefit of GenAI, says MacDonald, is the democratisation of AI where everyone has access to the technology.
“It’s like the world is waking up, understanding now what AI can do for them. And that has led to huge demand in the business,” he adds.
OCBC’s two-pronged approach to GenAI
MacDonald credits OCBC’s quick adoption of GenAI to its early implementation of AI technology.
“One of the reasons I think OCBC has moved so fast on GenAI is that we were actually using the first generation of large language models back in 2019 and 2020,” says MacDonald.
These language models include those offered by companies like Google, such as Bert and FinBert, which were used by OCBC to read the news and detect early signs of credit default by companies or recommend stocks.
When OpenAI’s large language model GPT-3 and ChatGPT took off at the end of 2022, OCBC’s team was able to move quickly to make its existing applications better, says MacDonald.
MacDonald also attributes the bank’s success in GenAI to the strength of its engineering team.
All of OCBC’s AI tools are built by its in-house data platform team using open-source tools.
“When you build (the model) yourself, you know exactly how the algorithm is coming up with those predictions. This gives greater transparency on how decisions are being made which you can better explain to the regulator or customers,” he explains.
The GenAI tools deployed within OCBC are used by its staff around 500,000 times each month.
MacDonald says that the bank has a two-pronged approach to using GenAI within the bank.
The first prong involves designing universal tools to help every staff member work more efficiently. OCBC GPT, for instance, can help employees draft content, such as their performance appraisals.
There is also Buddy, an internal knowledge assistant, that can answer employees’ questions on internal policies such as parental leave or expense application.
The second prong involves integrating specific AI tools with key functions within OCBC to help each role within the bank operate more efficiently.
For example, the IT team at OCBC has Wingman, an AI tool which helps them code faster, while the private banking relationship managers have a new GenAI tool that helps them to quickly get insights and talking points on investment ideas.
MacDonald says that the use of GenAI within OCBC is currently focused on improving productivity of staff. There is no direct interaction between customers and GenAI functions as of yet as there are still some risks involved.
This includes the risk of hallucination, which refers to AI providing customers with incorrect information. There is also the risk of adversarial prompting where AI could reveal workings of the bank’s models that OCBC does not want external parties to see.
Focusing the use of GenAI internally helps the bank build up confidence and capabilities in AI, says MacDonald.
Once the bank has developed guardrail controls that are robust enough to minimise these risks, it will consider allowing GenAI to be used directly with customers.
Ultimately, OCBC’s customers still benefit, even if GenAI is currently limited to internal use.
“The employee has a lot more information at their fingertips and is much more updated because GenAI is able to pull information together. So I think our customer-facing employees are able to serve their clients better with the use of these AI tools,” says MacDonald.
Envisioning a new future for banking
In the past year alone, GenAI has made “huge strides”, says MacDonald. Hallucination risks in GenAI has reduced, while OCBC has also improved its own capabilities to detect incorrect information generated by AI.
GenAI has also moved beyond “chatbot” type functions to handling complex tasks. For example, it can now read and understand images and documents, and automatically draft a proposed response back.
“So that really extends the capability of generative AI to actually be much, much more productive,” says MacDonald.
GenAI will create a future where customers can use conversational language to interact with banks and receive hyper-personalised service.
He imagines a day where a customer can verbally ask OCBC’s AI tools for updates on the market, and the AI tools can recommend and execute investments based on the customer’s risk profile.
Given the progress that OCBC has made in GenAI over the past year, MacDonald is confident that his imagined scenario can materialise within the next few years.
He says: “All the building blocks required to achieve that vision are already there today. It’s just about knitting them together and making sure you have the guardrails in place to allow you to be able to execute on that.”
Copyright SPH Media. All rights reserved.
