What’s next for financial services in AI and tech
The roles of artificial intelligence and technology in this sector are rapidly expanding, offering both opportunities and risks
ROUNDTABLE PANELLISTS
- Ben Tan, chief distribution officer, Prudential Singapore
- Shayan Hazir, chief digital officer for Asean, HSBC
- Praveen Raina, head of group operations and technology, OCBC
- Lawrence Goh, head of group technology and operations, UOB
- Han Kwee Juan, group executive and country head, DBS Singapore
Moderator: Benjamin Cher Correspondent, The Business Times
We are just seeing the tip of the iceberg for using artificial intelligence (AI) in financial services. How much more can AI be utilised in the future, and what are some guard rails and precautions that will need to be taken into account?
Ben Tan: There is great potential for AI to do more than just automate tasks to improve efficiency. In the future, it could be used to predict customer trends and risks in life and health insurance, as well as support financial representatives in delivering hyper-personalised financial advice to customers.
Although the use of AI brings about many benefits, the technology itself and guidelines on its use are still evolving. We must continue to guard against biases in algorithms, protect sensitive financial data, and develop robust governance frameworks to protect customer interests. By balancing innovation with these precautions, financial services can leverage AI responsibly and effectively.
Shayan Hazir: Asset tokenisation, AI and quantum will undoubtedly unlock powerful capabilities for banks in areas including risk mitigation, fraud detection and algorithmic trading. But we need a “step back” moment.
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The focus shouldn’t be only on making current products and services more efficient, but on whether they meet customer needs. We should leverage new technologies to customise products to individual needs, rather than the other way round. It’s already happening in other industries where customers choose their “playlist” – why should banking be different?
When it comes to establishing AI guard rails, it’s important that industry players and regulators within the financial ecosystem work together, such as in the case where the Monetary Authority of Singapore (MAS) recently partnered banks – HSBC included – and tech companies to enhance quantum security.
Praveen Raina: AI’s role in financial services is rapidly expanding, offering both opportunities and risks. Currently, applications primarily centre around risk management, fraud detection, and optimising investments. As AI advances, it has the potential to reshape customer interactions through hyper-personalised product recommendations, conduct real-time risk assessments, improve efficiency, and streamline decision-making.
That said, this promise comes with notable risks such as AI “hallucinations” and algorithmic biases that must be managed. To achieve both the efficiency gains AI promises and maintain the trust needed in financial services, it is crucial to strike a balance between automation and human oversight, which may require a human-in-the-loop approach to maintain accountability.
As AI adoption scales and evolves in the financial industry, trust, fairness, and security must be reinforced. Close collaboration between financial institutions, AI developers, and regulators is required to establish effective governance frameworks that address ethical use, fairness, and long-term reliability.
At OCBC, we have implemented frameworks to proactively assess the fairness of AI models before real-world deployment, with governance structures including committees to review compliance and materiality, ensuring responsible scaling.
Lawrence Goh: AI is now a crucial component to drive financial institutions’ (FIs) success. UOB leverages AI to deliver customer-centric experiences, improve risks and controls, enhance productivity and decision analytics, and execute business strategies. For instance, we use AI, machine learning (ML) and data analytics to power the UOB TMRW app in delivering personalised experiences to customers at scale. AI and ML tools are also used to detect potential money laundering and fraud risks.
We are also building our own generative AI (GenAI) platform with guard rails, and experimenting with multiple use cases in the areas of customer experience, the review of environmental, social and governance (ESG) risks, and tech development.
GenAI, despite its tremendous opportunities, also brings new and heightened risks that require additional controls and mitigations, including the misuse of AI for fraud, model hallucinations, data privacy risks and output biases.
UOB’s approach for GenAI adoption balances the need for governance with the speed to value. We leverage commercial GenAI apps such as Microsoft 365 Copilot to demonstrate early value, while concurrently establishing a solid foundation platform with guard rails and risk-mitigation capabilities for custom GenAI apps.
We continue to enhance our existing AI and ML governance bodies and frameworks to cater for GenAI risks, while guided by MAS’ fairness, ethics, accountability and transparency framework to ensure the technology is deployed in a responsible manner.
Han Kwee Juan: DBS has been working with AI for more than a decade, scaling our use of the technology across multiple use cases. More recently, we have integrated GenAI into our operations to boost efficiency and reduce toil, as well as deliver greater value to customers.
In 2023, we generated over 240 GenAI ideas, with 20 currently in implementation. One key initiative is the CSO (customer service officer) Assistant, which we developed in-house and piloted last year. By the end of 2024, our 500-strong CSO team in Singapore will use this GenAI-powered virtual assistant to better serve over 250,000 monthly consumer and corporate customer queries.
To enhance the customer experience for our consumer and wealth banking clients, we are also developing GenAI ideas in co-pilot mode, in wealth advisory, customer service, and sales.
As we forge ahead with innovations in AI and GenAI, we remain mindful of the potential risks, such as biases in decision-making and privacy concerns around handling sensitive data. To mitigate these, we’ve implemented a robust governance framework to ensure AI use is safe, fair, and compliant.
Guided by four principles – purposeful, unsurprising, respectful, and explainable (Pure) – we have refined this proprietary framework over the years, enabling us to unlock the potential of AI while managing its emergent risks.
Building on this, in 2020, we developed the responsible data-use model comprising the Pure framework and a model governance framework that guides how data would be utilised by analytical models. Additionally, our senior-level committee oversees AI use cases to ensure legal compliance and ethical integrity.
Digital technology has changed the way customers interact with financial services. With more self-serve options available, how will the increasing digital penetration change the high-touch efforts that FIs traditionally use to serve their customers?
Tan: Traditional and face-to-face customer touch points are increasingly complemented by digital touch points on websites, mobile apps and social media. This is driven by customer expectations for convenient and seamless experiences that give them the freedom to decide where, when, and how they want to engage with companies.
While digital touch points are growing, insurance is a people business and the personal connections established by our financial representatives remain valuable for complex insurance needs. The future of customer experience will combine the best of both worlds.
To really get the most out of this hybrid approach, AI and data analytics are crucial in providing actionable insights to help FIs tailor and personalise the customer experience across all channels, as well as identify areas for improvement in the customer journey.
Hazir: Put simply, it will allow our people to focus on the moments that matter. Tech should enable aspects of financial services to be faster and more convenient, but ultimately, we’re in the trust business and customers still want and expect in-person support at critical moments.
It’s not about eliminating the need for high-touch interactions, but rather redefining them. The key is in using data to create hyper-personalised solutions that cater to individual needs, when they need it and wherever they are.
As more self-service options become available, FIs will need to constantly innovate to keep up with evolving customer behaviours and deepen trust-based relationships.
Raina: As digital adoption in financial services accelerates, self-service options are reshaping customer interactions. However, institutions must balance this digital shift with personalised, high-touch services, especially for complex transactions or customers less comfortable with technology.
For example, we have invested heavily in AI-driven chatbots for routine tasks but maintain a robust human support network for wealth management clients, where personalised advice is crucial.
By leveraging data and straight-through processing automation, banks can provide real-time, tailored support while maintaining operational efficiency. This hybrid approach ensures customers receive the convenience of digital options without losing the personal touch that fosters trust and loyalty.
Goh: Banking is about building trust with our customers, which involves higher-level human cognitive capabilities such as emotional intelligence and empathy – elements that are hard for technology to replace.
This is why UOB adopts an omnichannel strategy where customers can engage with us via both physical and digital means, supported by an extensive network of branches and self-service banking machines, and complemented by our digital banking platforms such as the UOB TMRW app for their banking needs.
We also leverage AI to enhance customer experience and engagement at our branches and call centre. We are developing GenAI digital assistants trained on UOB’s products and services to work alongside our front-line employees who deal with thousands of inquiries from customers daily.
Through natural language prompts, or verbal instructions directly from customers, the digital assistants can analyse the sentiments of the customer and suggest relevant, concise responses. This complements employees’ efforts to deliver consistent quality service to our customers more quickly, accurately and smoothly.
Han: At DBS, we believe that digital technology doesn’t replace personal interactions – it enhances them, making them more meaningful and impactful. With advancements in digital capabilities, FIs can deliver not only high-touch experiences but also highly contextualised consultations. By leveraging data and technology, we can provide consistent and personalised experiences across both self-serve and assisted channels.
Think of it like a GPS-assisted driving experience – insights from digital technology guide interactions and empower staff to make more informed decisions, ensuring that customers feel supported and understood. For example, our data-driven nudges, which analyse over 15,000 customer attributes, guide our five million customers towards better investment and financial-planning decisions.
These are complemented by face-to-face consultations with our wealth-planning managers, who leverage the insights to help customers take targeted steps towards achieving their financial goals.
Moreover, digital technology allows us to address key areas of concern for customers, such as online security, fraud protection, and wealth planning. Trust, integrity, and credibility remain at the core of every interaction, whether it’s digital or in person.
ESG is becoming an increasingly important item on investors’ agendas. How will technology help financial services check those boxes for climate-conscious customers?
Tan: Technology is a powerful tool for helping FIs meet investors’ ESG needs. Through AI and data analytics, there is the potential for these institutions to better identify companies and industries with strong sustainability practices, and provide customers with more investment options that align with their values.
In addition, technology could help FIs streamline the process of gathering, verifying and reporting data, allowing them to track and report on their environmental impact more effectively. Digital platforms can also facilitate green investments by providing customers with insights on sustainable options. This way, customers can receive clearer and more accurate and transparent reports, making it easier for them to track their investments’ impact.
Hazir: Without data and technology, companies simply cannot deliver, or evidence, their transition plans. Technology provides the tools to aggregate and analyse vast amounts of data, including disclosures, sustainability practices and ESG claims, to increase transparency and build client trust.
At HSBC, we’re committed to supporting Singapore’s ambition to become a sustainability tech hub, and we do so by providing startups involved in clean technology innovation with access to banking services, including venture debt and working capital.
Additionally, AI-powered algorithms can also help to identify potential ESG risks and opportunities, with platforms that are able to incorporate scoring systems and portfolios aligned with specific sustainability goals that can help clients make informed investment decisions.
Raina: Technology is pivotal for FIs to meet growing ESG demands. Advanced data analytics enable the collection and reporting of ESG metrics, allowing firms to assess sustainability risks and opportunities effectively. However, inconsistent frameworks and data gaps hinder accurate assessments.
Looking ahead, enhanced collaboration between asset managers, data providers and regulators will drive the development of standardised ESG reporting frameworks. Leveraging AI and ML will refine data accuracy – enabling investors to make better-informed decisions – while blockchain may offer transparency in ESG compliance, shaping a future of accountable, climate-conscious investments.
Goh: As banks continue to support businesses and consumers in their sustainability journey, technologies such as AI, GenAI and ML have the potential to alleviate key constraints and enhance processes when managing ESG considerations.
As part of UOB’s responsible financing policy, we conduct due diligence checks on new and existing corporate customers for material ESG risks and their track record in sustainability. Our GenAI chatbot can search and condense relevant information from multiple data sources such as companies’ sustainability reports to support account officers’ completion of the ESG checklist, which comprises more than 90 questions to help them identify, assess and review the ESG risks of customers.
Removing the tedious task of manual data extraction grants account officers and credit approvers more time and bandwidth to focus on fact-checking and verification, leading to higher-quality decision-making, deeper insights to explore sustainable financing opportunities, and better advice to customers on decarbonisation. This programme is currently in its pilot phase and will be officially launched in the first quarter of next year across the bank.
Han: Technology is proving to be a powerful enabler in addressing ESG concerns, offering businesses and individuals new ways to take impactful action. We are focused on supporting and promoting meaningful sustainability journeys for our customers, helping both businesses and individuals make a positive impact in their lives and communities.
Nearly two million customers have engaged with DBS LiveBetter – a sustainability platform within our digibank app – taking meaningful actions such as contributing to environmental and social causes they care for, as well as investing in ESG funds and exchange-traded funds. We also estimate customers’ carbon footprint based on their card spending, offering tips on reducing emissions and the option to offset unavoidable ones by purchasing carbon credits.
Supporting local businesses is also a priority. Through the Spend Better programme, we partner eco-friendly merchants to offer discounts for customers using DBS or POSB cards. Customers can enjoy discounts when using their cards at these merchants, while businesses can gain visibility and reach a wider audience, allowing them to save on potentially hefty marketing costs.
To bring small and medium-sized enterprises (SMEs) along on the ESG journey, we jointly launched the ESG Ready Programme with Enterprise Singapore, to help SMEs strengthen their sustainability capabilities. This initiative was driven by the findings of a DBS-Bloomberg study, which revealed that over 60 per cent of SMEs lack a defined sustainability road map.
The programme offers two key benefits. First, SMEs receive foundational training, advisory and support in developing sustainability strategies, including guidance on implementation and tracking.
Second, DBS provides preferential financing rates to help offset the costs of adopting sustainable business practices. Today, more than 60 SMEs have begun their green journey through this programme.
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