The Banking Executive Magazine - July 2023 Issue

ISSUE 175 JULY 2023 the BANKING EXECUTIVE 1 Editorial AI IN BANKING: AN ERA OF TRANSFORMATION AND ADAPTATION We are at the tip of a digital revolution that is poised to redefine the business landscape, and the banking industry is no exception. The advent of advanced AI technologies like OpenAI's ChatGPT is fueling this transformation, bringing a slew of opportunities as well as challenges for banks worldwide. AI's growing prominence has triggered debates around job displacement, and estimates are that AI could replace the equivalent of 300 million full-time jobs, affecting a quarter of work tasks in the US and Europe. AI's footprint varies across different sectors, and the banking industry, owing to its heavy reliance on data and repetitive tasks, could see significant changes. OpenAI's ChatGPT, with its advanced language processing abilities, is one such AI tool that could reshape banking. Automating routine tasks, handling customer service inquiries, enhancing security measures, and personalizing banking experiences are just a few areas where ChatGPT's capabilities could be leveraged. The tool's potential to offer 24/7 customer assistance, provide real-time data analysis and suggestions, and contribute to risk management are transformative. However, these advancements come with concerns about job losses and wage reductions. As AI takes on more banking functions, the fear of job displacement is real. Yet, history teaches us that every technological shift brings new opportunities. When GPS technology revolutionized the transport sector, it didn't lead to fewer drivers, but it did reduce the value of certain skills. So, how can the banking industry best navigate this new landscape? First, it is essential to understand that AI and human employees are not adversaries but partners. AI can automate repetitive tasks, allowing human employees to focus on more complex tasks and innovative endeavors. AI can supplement human roles, not necessarily supplant them. Second, the banking industry needs to prioritize upskilling and reskilling its workforce. As AI automates routine tasks, there will be an increased demand for skills that AI cannot replicate, such as creativity, emotional intelligence, and critical thinking. Third, while embracing AI technologies like ChatGPT, banks must address potential challenges, including cost, security, and technology dependence. A balanced approach, where technology and human efforts complement each other, could be key to adapting to these changes. As we stand on the brink of this new AI-powered era, it is critical to remember that the focus should always be on serving the customers better. AI is a tool, not a solution unto itself. If we can leverage it to improve our services, while concurrently investing in our workforce, the future of banking is indeed bright. Dr. Joseph Torbey, Chairman - World Union of Arab Bankers