Whenever new technology takes center stage in the financial services industry, banks become divided into two categories: the leaders and the followers.
The leaders (typically larger institutions with ample resources) will take the tech for a spin and determine how they can extract the most value out of it. They’ll identify who in the bank could benefit most from the latest innovation and which use cases might be irrelevant. They’ll implement specific policies and procedures to guide employees on how to responsibly leverage the technology to prevent misuse.
Once the big banks have worked out the kinks, smaller banks and credit unions will follow the same playbook. These institutions may not have the ability to test and iterate on every new tech tool that promises to make their lives easier or improve their workflows, so they’ll look to industry leaders for guidance.
While this approach has worked well for the emergent tech trends of the past, it has become obsolete in the face of generative AI.
When “follow the leader” falls short
With AI, the difference between leader and follower isn’t just about who gets there first; it’s about who gets left behind.
The way we search for information, the way we complete our daily tasks, and the way we communicate with our customers - all of these processes have irrevocably shifted in the age of artificial intelligence. So too must the way community banks and credit unions evaluate new tech tools, namely those powered by generative AI.
Here’s why: following the big banks’ lead isn’t going to work for AI. Most larger institutions’ generative AI strategy involves hiring a Chief AI Officer and/or building their own custom solutions in-house. These organizations are able to allocate vast amounts of resources to AI-focused roles. They can hire or appoint an executive lead who’s responsible for oversight. They can build on existing solutions to fit their institution’s unique needs. They can partner with a Big Four consulting firm and outsource development.
But these options don’t exist for most banks and credit unions. Many such institutions may lack the budget to hire a brand new executive, or the in-house technical expertise to create a new solution from scratch. Spending a large sum of money to hire and/or outsource isn’t always an option. Even for banks that do have the resources, it’s not an approach we’d recommend.
Alternative approaches
A lack of resources or desire to conserve them shouldn’t (and doesn’t need to) hold banks back from generative AI strategy. Here are three alternative approaches for institutions to consider:
Utilization: Which teams used GenAI the most and why? The ROI may not be there yet, but why was this group the most active?
Impact: Which group had the most measurable impact? Did using generative AI save time? Money? How much?
Adoption: Which team had the most users? This is separate from general utilization, because a few power users may skew a team’s overall utilization metrics. Which team had scale? Why?
Creativity: Which group expanded on existing use cases and pushed innovation? What prompted them to do so?
It’s critical to set clear goals at the beginning of this process. Value is created in any number of ways, some of them non-traditional (e.g. employee satisfaction, customer response times, reduced time to complete tasks, fewer errors on specific tasks, etc.).
The applications of various generative AI solutions will be unique to each institution based on their long-term goals and how they operate. Success must be defined by institution, functional area, and individual. By finding strength areas within the institution, banks can create peer groups that can educate, train, and identify new opportunities as GenAI becomes a staple in daily operations. Identifying those people now and creating a culture that supports these efforts will result in less time to adoption and measurable ROI.
How can Hapax help?
You can’t be a follower in the age of AI.
No matter who spearheads generative AI strategy at your institution, the combined power of this cross-departmental group and/or individual with Hapax’s industry, regulatory, and institutional expertise enables every bank to become a leader in the AI revolution.
Are you ready to outsmart the future? Book a demo with Hapax today.
