How Should Financial Institutions Transform Their Operations Using Gen AI
At the MoneyLIVE Summit 2024, Red Hat’s Monica Sasso and Richard Harmon discussed how banks can leverage Gen AI for transformation and shared best practices for its implementation, as stated in FinTech Magazine.
Richard Harmon, Red Hat’s VP & Global Head of Financial Services, highlighted that while Gen AI shows promise, the hype around its adoption will persist. He emphasized the need for banks to understand how to best apply Gen AI while collaborating with regulators to evolve regulations. “When it comes to Gen AI, there’s still constant innovation coming across,” Harmon stated. He noted that banks must comply with the EU-AI Act, which places AI-based creditworthiness and risk assessments in the ‘high risk’ category, requiring strict compliance.
Harmon shared an example from Banco Galicia, an Argentinian bank that used predictive AI and natural language processing to streamline corporate onboarding. The bank significantly reduced processing time and provided personalized onboarding experiences for customers. Harmon suggested that Gen AI could further enhance these processes by reducing time and offering embedded financial products.
Monica Sasso emphasized the importance of integrating Gen AI into cybersecurity measures. “AI is already here, we’ve been using it for years,” she said, highlighting the need for real-time operational resilience. Sasso pointed out that Red Hat is helping clients integrate AI with threat-hunting software to automate cybersecurity activities, crucial for banks facing massive hacking attempts. “It is so critical because these things keep the lights on,” she added.
Sasso stressed the need for simplifying AI applications and upskilling the workforce. She underscored the importance of understanding software supply chains and ensuring malware-free code. “This comes down to having the right expertise and skills to effectively understand the new risks that are created,” she said, emphasizing Red Hat’s role in educating clients.
Sasso and Harmon discussed the gradual process of overhauling banking infrastructures. Red Hat’s OpenShift hybrid cloud platform helps banks modernize software on legacy systems and migrate to cloud-native systems. Harmon noted that hybrid multi-cloud services reduce technology duplication and cognitive load on developers, allowing for enterprise-wide application deployment.
The integration of AI in banking holds immense potential, but banks must navigate regulatory challenges and ensure robust systems for AI integration. As Sasso concluded, “It’s really about educating them on the things they need to know, the things they need to be aware of and have some kind of control over.”