Embracing the AI opportunity in banking: 4 insights from Backbase’s Chris Shayan

By now, we’ve hopefully inspired you to adopt AI at your bank, whether that’s in an internal or customer-facing capacity (or maybe even both). But being convinced of the value is just the beginning — you’ll also need to actually implement this cutting-edge tech, and you may not know how to get started. That’s why we interviewed Chris Shayan, our Head of AI, formerly CTO of Techcombank, so he could share 4 insights that will help ensure your AI journey is a success.

Here’s a few of the key things he said your bank should keep in mind:

As we’ve mentioned before, the “wait and see” approach to AI is becoming increasingly problematic, because although you might not want to be the first bank to adopt it, you definitely don’t want to be the last. High-profile institutions like JP Morgan Chase and Wells Fargo have already led the charge on generative AI-based employee tools and AI-powered virtual assistants, respectively. And that means other banks can’t be far behind.

“Banks may not be shouting about adopting AI — they’re not reckless — but I think many are already experimenting with it,” Chris said.

And as more and more institutions jump on the bandwagon, your bank will find it increasingly difficult to use AI as a differentiator. Make no mistake, the AI hype cycle is in full effect, thanks to companies like Apple, and that means your customers are waiting to see how you’ll leverage this tech — not whether you’ll adopt it at all. So get started now, even if that means starting small.

“You can start with a friends and family launch first, then slowly roll out all the way,” Chris noted. “And if your bank is comfortable, there’s no reason why you can’t adopt it on a larger scale.”

Having said that, Chris said it’s essential to have a specific business use case in mind before you begin. Simply rushing an AI value prop to market will never work if you don’t have a clear vision for its usage, as this will make it impossible to budget, among other things.

“Always start with the business case so you can actually define what’s needed to get it done,” Chris explained. “Ask yourself why you want to adopt AI; what’s the problem you want to solve? If you scope down the business case, then automatically, you're scoping down the risk and cost as well, and then we can have a proper conversation about ROI.”

He explored the example of a customer lifetime orchestrator, which would allow your bank to create AI-driven product activation and up-sell campaigns across a timeline that would enable you to increase product holding per new-to-bank and existing customer.

“If you go with this kind of solution, you can clearly say that, in order to deliver that result, I’ll need this much AI computation,” Chris said. “I’ll need a specific budget and this percentage of the running capability of my OpEx. At the end, the outcome declares the investment, so if you’re able to generate ten million with a million-dollar investment, then that’s a solid ROI. But it always comes back to the business case.”

He also emphasized that starting with the business case in mind can help with risk mitigation and cost reduction.

“Like most things in banking, we don't have an option for zero risk with AI,” Chris noted. “But if you know what you’re looking to get out of it, you can define the risk and investment factors, whether it’s worth it, and if there’s a way to mitigate them. There’s a lot of innovations to bring the cost down, like semantic caching, but that only works if you already know the use case.”

Next, Chris stressed that adopting tech for tech’s sake rarely works and that AI should always be used to better serve the customer. Rather than looking at it as a revolutionary new style of banking, he said you should think of it as an advanced tool that can help you reach your business objectives, of which customer-centricity should be front and center.

“I’m very much against it when people talk about traditional vs. AI banking,” he said. “There’s no such thing, it’s only banking. The more technology evolves, the more ways you have to serve your customers, but remember that it’s just a tool that helps you achieve that goal.”

And while AI will allow you to reduce headcount, particularly when it comes to tiresome manual processes — like data entry and processing — you don’t want to lose the human touch. Because, while 77% of consumers say AI is helpful for solving simple banking problems, according to a recent survey, 63% still want personal, one-on-one conversations with representatives. This indicates that the human touch in banking remains critical, but you can always use AI to make your employees faster, smarter, and better at their job.

Like all next-level tech, adopting AI at your bank will take considerable time and resources but, Chris said, a platform model goes a long way towards streamlining the process. For example, he talked about repetitive manual tasks, which can be automated with an AI script, but microservices seriously expedite things.

“If you follow platform architecture, of course it's a lot easier for the AI to do what it needs to do,” he explained. “When you have a platform in place, with all the available capabilities and microservices, adoption of AI is a lot faster.”

So, before you get started, consider working with a strategic partner to implement a platform model. That will make it easier to automate routine tasks, reduce costs and time, and offer a superior customer experience. And things get even easier if they’re able to help you progressively modernize, as this will allow you to continually adapt to new trends and customer expectations.

And speaking of strategic partners, you’ll want to choose a vendor that’s a great fit for your bank’s AI journey. In the next blog, we’ll explore the AI strategies of the top 9 digital banking platforms on the market — from Alkami to Temenos — to make the selection process a little clearer.

For more information, check out our Banking Reinvented podcast, where Backbase Founder/CEO Jouk Pleiter dissects similar topics alongside Tim Rutten, EVP/Chief of Staff, and other digital leaders. Stay tuned as they chat about everything from progressive modernization to decomposing your bank’s complexity.