Big banks are talking up generative A.I. — but the risks mean they’re not diving in headfirst
The GPT-4 logo is seen in this photo illustration on 13 March, 2023 in Warsaw, Poland.
Jaap Arriens | Nurphoto | Getty Images
AMSTERDAM, Netherlands — Major banks and fintech companies claim to be piling into generative artificial intelligence as the hype surrounding the buzzy technology shows no signs of fizzling out — but there are lingering fears about potential pitfalls and risks.
At the Money 20/20 fintech conference in Amsterdam, Netherlands, executives at large lenders and online finance firms sang the praises of generative AI, calling it an “explosion of innovation,” and saying it will “unleash innovation in areas that we can’t even think about.”
related investing news
Chalapathy Neti, head of AI at global bank messaging network Swift, described the progress made with ChatGPT and GPT-4 as “mind-boggling.” He added, “This is truly a transformative moment.”
But in the short term, banks are scrambling to figure out the use cases.
The Netherlands’ ABN Amro is one banking giant that’s piloting the use of generative AI in its processes.
Annerie Vreugdenhil, chief commercial officer of ABN Amro’s personal and business banking division, revealed on a panel that it is using the technology to automatically summarize conversations between bank staff and customers. It’s also using it to help its employees gather data on customers to assist with answering queries and avoid repetitive questions.
The bank is now in the process of scaling these pilots to 200 employees and is exploring a number of new pilots to start this summer.
In a closed-door session on the application of AI in financial services, meanwhile, two banking executives explained how they’re using the technology to improve their internal code and analyze how their clients are behaving.
“We are experimenting at this stage and we don’t have necessarily anything client facing but we are using the [tech the] same as other companies, for example, code refactoring, comms calls, the other way around,” said Mariana Gomez de la Villa, an executive at ING Bank specializing in strategy and innovation.
Indeed, the banks appeared unanimous in their hesitation to roll out ChatGPT-like tools to customer-facing scenarios.
Jon Ander Beracoechea Alava, advanced analytics discipline head at Spanish bank BBVA, said that the lender had taken a “conservative approach” to AI, adding that, at this stage, generative AI is “still early” and “immature.”
A crucial issue is that advanced AI systems require the processing of huge volumes of data — a sensitive commodity wrapped up in all kinds of rules and regulations. As such, Alava said that at this stage it was too “risky” to involve sensitive information from customers.
Generative A.I., explained
Generative AI is a specific form of AI that is able to produce content from scratch. The systems take inputs from the user and feed them into powerful algorithms fueled by large datasets to generate new text, images and video in a way that’s more humanlike than most AI tools already on the market.
The technology was thrust into the spotlight following the success of OpenAI’s GPT language processing technology. ChatGPT, which uses massive language models to create human-sounding responses to questions, has ignited an arms race among some companies over what is seen as the next “paradigm shift” in tech.
In March, Goldman Sachs‘ chief information officer, Marco Argenti, told CNBC the bank is experimenting with generative AI tools internally to help its developers automatically generate and test code.
More recently, in May, Goldman spun off the first startup from the bank’s internal incubator — an AI-powered social media company for corporate use called Louisa. The push into AI is part of a larger effort by CEO David Solomon to expedite the bank’s digital makeover.
Morgan Stanley, meanwhile, is using it to inform its financial advisors on queries they may have. The bank has been testing an OpenAI-powered chatbot with 300 advisors so far, with a view to ultimately aid its roughly 16,000 advisors in making use of Morgan Stanley’s repository of research and data, according to Jeff McMillan, head of analytics and data at the firm’s wealth management division.
A.I. ‘co-pilot’
These are just some examples of how financial firms are using AI, but more as a digital helper than as a core part of their services.
Gudmundur Kristjansson, CEO and co-founder of Icelandic regulatory technology firm Lucinity, showed CNBC how artificial intelligence can be used to assist with a key area in finance: fighting crime.
An AI tool the company created, called Luci, aims to help compliance professionals with their investigations. In a live demonstration, Kristjansson showed himself looking into a money laundering case. The AI tool analyzed the case and described what it saw and then completed an independent review.
In this use case, the AI acts as more of a resource — or “copilot” — to help an employee find data and flesh out a case rather than replace the role of a person looking into reports of suspicious activity.
“Where you find money laundering is through … interconnected networks of people who are basically employed to do it. That’s why it’s so hard to find it. Banks spent this year $274 billion on prevention,” Kristjansson told CNBC in an interview.
He said where Luci helps is by vastly reducing the amount of time spent trying to work out whether something is fraud or money laundering.
The whole appeal of AI to the big banks and fintechs, Money 20/20 attendees said, is the potential reduction in the time and money it takes to complete tasks that can take human employees days.
Niklas Guske, chief operating officer at Taktile, a startup that helps fintechs automate decision-making, acknowledged that the use of AI is challenging in the financial sector, given the lack of publicly available data.
But he stressed that it could be a “crucial” tool to reduce the companies’ operational expenses and improve efficiency.
“In many fintech applications, this is done through an increase in automation and reducing manual processes, especially in onboarding and underwriting,” he told CNBC.
“This automation is truly enabled through access to more data sources, which empower lenders to gain new insights and identify the right customers without having to parse through dozens of PDFs for the right piece of information.”
— CNBC’s Hugh Son contributed reporting.
Technology
Cognition to buy AI startup Windsurf days after Google poached CEO in $2.4 billion licensing deal
In this photo illustration, a man seen holding a smartphone with the logo of US artificial intelligence company Cognition AI Inc. in front of website.
Timon Schneider | SOPA Images | Sipa USA | AP
Artificial intelligence startup Cognition announced it’s acquiring Windsurf, the AI coding company that lost its CEO and several other senior employees to Google just days earlier.
Cognition said on Monday that it will purchase Windsurf’s intellectual property, product, trademark, brand and talent, but didn’t disclose terms of the deal. It’s the latest development in an AI talent war, as companies like Meta, Google and OpenAI fiercely compete for top engineers and researchers.
OpenAI had been in talks to acquire Windsurf for about $3 billion in April, but the deal fell apart, and Google said on Friday that it hired Windsurf’s co-founder and CEO Varun Mohan. Google is paying $2.4 billion in licensing fees and for compensation, as CNBC previously reported.
“Every new employee of Cognition will be treated the same way as existing employees: with transparency, fairness, and deep respect for their abilities and value,” Cognition CEO Scott Wu wrote in a memo to employees on Monday. “After today, our efforts will be as a united and aligned team. There’s only one boat and we’re all in it together.”
Cognition didn’t immediately respond to CNBC’s request for comment. Windsurf directed CNBC to Cognition.
Cognition is best known for its AI coding agent named Devin, which is designed to help engineers build software faster. As of March, the startup had raised hundreds of millions of dollars at a valuation of close to $4 billion, according to a report from Bloomberg.
Both companies are backed by Peter Thiel’s Founders Fund. Other investors in Windsurf include Greenoaks, Kleiner Perkins and General Catalyst.
“I’m overwhelmed with excitement and optimism, but most of all, gratitude,” Jeff Wang, the interim CEO of Windsurf, wrote in a post on X on Monday. “Trying times reveal character, and I couldn’t be prouder of how every single person at Windsurf showed up these last three days for each other and for our users.”
Wu said that the acquisition ensures all Windsurf employees are “treated with respect and well taken care of in this transaction.” All employees will participate financially in the deal, have vesting cliffs waived for their work to date and receive fully accelerated vesting for their, according to the memo.
“There’s never been a more exciting time to build,” Wu wrote.
WATCH: Google snatches Windsurf CEO after OpenAI deal dissolves
Meta CEO Mark Zuckerberg looks on before the luncheon on the inauguration day of U.S. President Donald Trump’s second presidential term in Washington on Jan. 20, 2025.
Evelyn Hockstein | Reuters
Meta on Monday said it has removed about 10 million profiles for impersonating large content producers through the first half of 2025 as part of an effort by the company to combat “spammy content.”
The crackdown is part of Meta’s broader effort to make the Facebook feed more relevant and authentic by taking action against and removing accounts that engage in “spammy” behavior, such as content created using artificial intelligence tools.
As part of that initiative, Meta is also rolling out stricter measures to promote original posts from creators, the company said in a blog post.
Facebook also took action against approximately 500,000 accounts that it identified to be engaged in inauthentic behavior and spam. These actions included demoting comments and reducing distribution of content, which are intended to make it harder for these accounts to monetize their posts.
Meta said unoriginal content is when images or videos are reused without crediting the original creator. Meta said it now has technology that will detect duplicate videos and reduce the distribution of that content.
The action against spam and inauthentic content comes as Meta increases its investment in AI, with CEO Mark Zuckerberg on Monday announcing plans to spend “hundreds of billions of dollars” on AI compute infrastructure to bring the company’s first supercluster online next year.
This mandate comes at a time when AI is making it easier to mass-produce content across social media platforms. Other platforms are also taking action to combat the increase of spammy, low-quality content on social media, also known as “AI slop.”
Google’s YouTube announced a change in policy this month that prevents content that is mass-produced or repetitive from being eligible for being awarded revenue.
This announcement sparked confusion on social media, with many users believing this was a reversal on YouTube’s stance on AI content. However, YouTube clarified that the policy change is aimed at curbing unoriginal, spammy and repetitive videos.
“We welcome creators using AI tools to enhance their storytelling, and channels that use AI in their content remain eligible to monetize,” said a spokesperson for YouTube in a blog post to clarify the new policy.
YouTube’s new policy change will take effect on Tuesday.
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Sports2 years agoButton battles heat exhaustion in NASCAR debut
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike