Author: Matteo Guarino

  Date: 13-05-2025

 

The banking sector, historically known for its complexity and strict procedures, has undertaken a significant evolution over the last few years. In the past, the banking processes were largely dependent by manual approval chains that slowed down the service offered thus increasing the possibility of human errors. With technological process, the largest banks have digitalized and optimized their tasks by using Artificial Intelligence (A.I.) in different ways to manage risks and improve operational efficiency.

It quickly performs cognitive tasks that typically require human minds, meaning that powerful algorithms enter in the software, relate instantly to specific requests and exhibit different capabilities such as reasoning, learning and processing answers.

To ensure the security of I.T. data in the interest of everybody, financial intermediaries follow a responsible approach based on four principles: Explainability, to make sure A.I. generated solutions are clear and transparent for all users; Fairness, to use them in a non-discriminatory way;  Data-quality, to demonstrate the reliability of their output; Human-in-the-Loop, to ensure that there are always humans who supervise the decisions made by A.I. systems. The banks have started to implement Robo-Advisors, digital platforms that integrate customized asset management without human intervention and, with lower operational costs correlated, analyze the client’s financial profile.

Credit scoring, one of the main A.I. applications in the banking sector, refers to the mathematical evaluation of the company’s default risk that it won’t meet entire debt obligation towards the bank. Using statistical variables and financial data, the system relies precisely on four factors (credit history, level of indebtedness, punctuality of payment and asset composition), so that financial institutions strategically fix the appropriate flexibility and repayment structure for its client.

A.I. models are also used to prevent banking frauds, where more advanced tools are able to monitor billions of transactions in real time per second and identify suspicious activities that deviate from normal customer’s behavior. Then, Chatbot consists of an automated live chat function that enables clients to ask assistance 24/7 to the bank through the algorithm ability to understand and generate responses, according to Natural Language Processing (NLP), regardless of how they are formulated.

QUALITATIVE SURVEY

• Interviews performed: [5,10]
• People: Managers and Employees of Retail Banking Division
• Age: 25≤ X ≤ 55
• Time: 30-45 minutes each
• Period: July 2024

A qualitative survey, conducted among managers and employees of the two main Italian financial institutions (Intesa Sanpaolo and UniCredit), has highlighted the following aspects:

• Artificial Intelligence is integral part of daily work activities and present in almost every banking area (Asset Management, Debt Financing, Risk & Compliance, Cybersecurity).
• It facilitates the lending process, offers customized investment solutions and proves to be a powerful tool in the fight against bank fraud.
• In general, there is a favorable attitude towards new tools and a positive perception towards Artificial Intelligence, which is seen primarily as an opportunity and support for the profession and not as a threat.
• The potential of A.I. lies mainly in its ability to perform complex tasks in a short period of time while leaving humans to control and interpret the results produced by the technologies and make the final, correct and appropriate decision for the client.
• I. solutions are perceived as a competitive factor that can significantly improve bank’s profitability.
• Younger employees appear to be more enthusiastic towards these new technologies, tend to trust more on the solutions produced by A.I. and feel the need of a targeted training in the use of these tools with respect to their more experienced colleagues.
• Older employees, on the other hand, have a more skeptical attitude towards this technology, are able to be more critical, reflective and trust more their professionalism and experience.
• The human role is considered irreplaceable because it has qualities such as empathy, intuition and ethics that A.I. cannot replicate; humans are able to understand the customer’s specific needs and emotions more deeply.
• Among the benefits of Artificial Intelligence, there are the simplification and optimization of various banking processes, speed of response, reduction of human error, great support in decision-making, ability to predict customer’s needs and seizing the best market opportunities.
• Among the risks are included dependence on A.I. itself with consequent reduction of human analytical capabilities, over-automation with loss of skills and jobs, violation of client’s privacy and personal data, standardization of solutions, depersonalization of the client-consultant relationship and misinterpretation, without critical spirit, of the results produced by A.I.
• The most widely used Artificial Intelligence tool appears to be the Robo Advisor, a digital platform that offers an automated financial advisory and tailored investment solutions based on user’s risk profile and financial goals. Great help is also provided by Chatbots, advanced virtual assistants used to answer customer’s questions and provide them assistance.
• Common between banking employees is the concern about the impact of A.I. on employment and the fear that it will suppress their professionalism.
• The degree of customers’ satisfaction and awareness in the use of Artificial Intelligence procedures in the banking sector is still low as they are not well informed and involved in the process.
• Essential for banks, in order to remain competitive and offer a high-quality service to customers, to start upgrading their employees by offering them specific training courses in order to develop those skills necessary to better understand and interpret such tools.
• Crucial for banks is a greater involvement of clients in this technological process: customers want to understand the logic behind the decisions made by A.I. and to be informed about how such technologies can influence their investment decisions.
• Regarding future developments of this technology, among the big banks there is an increasing focus on Generative A.I. and its potential. With its ability to produce automated summaries and financial reports in a very short time, it could significantly enhance the Risk and Compliance function of banks.

The challenge for the future is to find a right synergy between the efficiency of A.I. and the reliability of the human factor by always keeping the end-user at the center of everything.