CIOs discuss the impact of AI on the financial services industry

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To gain a better understanding of how AI is reshaping the financial services industry, CIO South Africa caught up with Sasfin Bank CIO Josh Souchon, Old Mutual CIO May Govender and iWYZE CTO Mbusiswa Nyuswa.

2023 Digital Innovation and IT Project of the Year award recipient Josh Souchon explains that at Sasfin, AI is being used in different ways and at different levels of maturity, though all are focused on assisting employees in their roles, from credit decisioning (Scorecard) to producing minutes of meetings with actions, owners and due dates (Copilot).

However, according to Josh, the regulatory environment is very strict in how and where client and transactional data, the ‘crown jewels’, as he puts it, is used. “This creates a challenge when using generative AI and therefore, following first principles (IT architectural, governance and risk) must be applied at all times,” Josh adds.

Josh believes that ChatGPT use cases are limited due to the open nature of the information that can be shared, as amazing and useful it is in supporting employees in their day-to-day duties.

“Copilot, on the other hand, fits in well within the enterprise, and the required security model proves very useful when minuting meetings, summarising project work and even analysing data. Other specialised tools work well in decision support systems (i.e., credit decisioning, fraud detection, and anti-money laundering processes).”

There is great potential in AI shaping the future landscape of financial services, particularly in areas such as risk management, fraud detection, customer service and investment strategies, Josh agrees.

“AI is key to the future of all of these areas and several others,” he explains. “AI’s ability to work across multiple complex dimensions is proving very useful, though an outcomes-based approach needs to be followed with a clear understanding of what success looks like before embarking on each journey, and then determining how to learn from the failures and pivot to the desired outcome.”

An insurer’s perspective

From an insurer’s side, Old Mutual CIO May Govender outlines some of the benefits the insurer has gained from utilising AI:

  • AI-powered chatbots and virtual assistants – chatbots can handle customer inquiries, claims processing, and policy management, improving efficiency and customer satisfaction.
  • Claims processing – AI streamlines claims processing through automation, reducing the time and resources required to settle claims while also minimising errors.
  • Personalised policies – AI analyses customer data to tailor insurance policies to individual needs and behaviours, offering personalised coverage options and pricing.
  • Underwriting automation – AI automates the underwriting process by analysing various data sources, speeding up decision-making and improving accuracy.

May goes on to explain some of the key challenges and barriers her organisation has encountered in implementing AI technologies, notwithstanding the potential skills shortage it might create and AI’s tendency to be inaccurate. May highlights the ethical considerations around the use of generative AI.

“Looking at misinformation and manipulation, generative AI has the potential to create realistic-looking content, such as fake news, misleading information, and manipulated media,” she says. “In addition, AI algorithms may inadvertently perpetuate or amplify biases present in the training data, leading to biased or unfair content generation. Addressing bias in AI systems requires careful attention to data selection, algorithm design, and ongoing monitoring and evaluation.”

Mbusiswa Nyuswa is CTO of iWYZE, a division of Old Mutual Group. He and his team are already experimenting with large language models (LLMs) and generative AI.

“We’re seeing major customer experience improvements from a self-service perspective, and reduction in our call centre handling time per agent,” Mbusiswa says. “There’ve been improvements on the delivery speed and quality of work from our development teams as they embrace AI in their day-to-day tasks.”

Despite being a huge fan of LLMs, one stumbling block he sees from an African perspective largely has to do with those models being unable to translate our indigenous languages effectively.

“Being a rainbow nation with our beautiful indigenous languages makes it challenging for the LLMs to adequately understand the conversations in the conversational AI solutions,” he explains. “More work is required to ensure that foundational LLMs are taught to fully comprehend our languages, as a single conversation can go from English, Afrikaans and isiZulu to even township slang.”

However, Mbusiswa is optimistic and plans to continuously adapt and innovate AI initiatives at the insurer to keep pace with evolving technologies and customer expectations by keeping abreast of all technology developments and creating strategic partnerships with key AI experts in the industry.

The IT leaders also discussed the plausibility of a scenario in which AI assumes tasks typically performed by humans. This transition could result in CIOs increasingly turning to automated IT services, consequently reducing the number of employees in South Africa.

“I do not see AI as a threat to our well needed jobs in South Africa. Rather, I see AI as an extension to what people do,” Mbusiswa notes. “Our customers require more specialised and personalised services. Therefore, as a responsible leader, the task is to find the mundane and repetitive time-consuming tasks that AI can take over, and redirect people to roles that are more meaningful and specialised.”

Josh, on the other hand, is on the fence about this. “Yes and no,” he says. “I see AI giving South Africa the ability to ‘leapfrog’ within the world in the same way cell phones have allowed our country to.

“Yes, as routine and mundane tasks will very quickly be taken on by AI and performed with unerring levels of accuracy and repeatability. No, as we have seen in the past, if you allow your employees to retrain, reskill and grow they will embrace the opportunities of AI to outsource routine tasks and leverage their understanding of their business and the customers to add greater value through their newly acquired skills,” Josh concludes.

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