Small banks face significant challenges due to legacy technology while striving to enhance competitiveness through generative AI (Gen AI). The potential of Gen AI to improve customer experience and operational efficiency is significant, yet constraints such as time and resources hinder progress. To thrive, small banks must identify effective use cases that warrant investment. Some promising areas include fraud detection, where Gen AI can streamline monitoring systems, and customer service automation, which can improve interaction quality and efficiency.
Fraud Detection: Bad actors are already using Gen AI to game financial systems for their gain. Criminals were able to defraud Americans out of $21 million between 2021 and 2024 using voice cloning technology the efficacy of which has been significantly improved by modern LLMs. Most big organizations are fighting this fire with fire, and using Gen AI tools to identify new types of fraud tactics as well as improve their fraud detection systems.
Customer Service Automation: Bank of America is about to enhance its award-winning digital assistant Erica with Gen AI. Small banks and FIs can learn from this playbook, and integrate Gen AI technology.
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