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What Banks Need to Know about Generative AI with Prashant Jajodia from IBM


London remains a financial technology power-house today. Banks have embraced digital transformation in order to give customers better online experiences. Fintechs based out of London are also well recognized on the global stage. One of the companies benefitting and leveraging the change is IBM. Prashant Jajodia, Managing Client Partner and Financial Services Sector Leader, IBM Consulting, shared some of his unique insights with #DisruptionBanking.

Last year Prashant released a story on the IBM website. In it he explained how he believes we have entered chapter three of digital transformation in banking. Chapter one focused on mobile apps and online branding. The following chapter was about digitising customer journeys. Then there was chapter three.

Some of the insights Prashant focuses on in chapter three are about building an ecosystem beyond banking, hyper personalisation, and instant fulfilment. He also explains how cloud provides the AI required to analyse the rich datasets available within banks. We asked him to expand on what IBM is doing for clients who are looking for AI solutions when we met with him last week.

There is no better time to be in Banking and Technology

Prashant has been in banking and technology his entire career. In his role he works with clients who are interested in artificial intelligence, as well as other technology solutions. We started our discussions by Prashant explaining how IBM will be making money from AI. In order to better explain this, he pointed out the importance of the watsonx platform for IBM’s enterprise clients. and are available as part of the watsonx family of products. These new products are all derived from the legacy of the Watson supercomputer that gained notoriety in 2011:

In a report from 2015, IBM called Watson “the future of knowing.” As the popularity of AI has constantly risen, so has interest in IBM’s AI supercomputer and enterprise services.

“Watsonx is a platform for our enterprise clients to use and implement generative AI in their business,” Prashant explained. “Watsonx is an extension of Watson. It comes with IBM’s foundation models, with which we provide assurances relating to data lineage and ownership.” These assurances are needed as the system is providing clients with generative AI. And this needs outcomes to be trusted, Prashant highlighted.

“In order to be 100% sure of the explainability and accuracy of the outcomes and responses of generative AI, you need governance and trust in the data,” Prashant described. It’s this approach that allows AI to be generated using watsonx.

Importantly, the platform allows foundation models other than just IBM’s to be incorporated.

IBM Consulting unveils Center of Excellence for generative AI

The next point that Prashant highlighted was the recent news about how IBM Consulting has established a Center of Excellence (CofE) for generative AI. The new CofE stands alongside IBM Consulting’s existing global AI and Automation practice, which includes 21,000 data and AI consultants.

The Center of Excellence is a global team, explained Prashant. It is based in many locations around the world, and services clients from any part of the world. The CofE will support clients implement Generative AI uses cases on not only Watsonx but but other Generative AI platforms from the likes of Microssoft, AWS, GCP, Anthropic, etc.

“We have global client innovation centres (CICs) in locations across the world, and this is where the Center of Excellence teams will also be based,” Prashant explained.  

Of course, artificial intelligence needs regulation. Especially when there is so much interest and demand from the market. Prashant explained two of the key reasons for regulation when it comes to AI.

“One of the reasons we need regulation in AI is to ensure that this technology doesn’t get into the hands of bad actors,” Prashant shared. “The other reason is to ensure that when enterprises are implementing this technology, that it doesn’t lead to bad outcomes.”

In order to better prevent bias or bad outcomes for customers, IBM leverages the knowledge of a specialist team which deals with governance.

Ensuring the Right Outcomes with Watson.Governance

The third element that the watsonx platform includes is watsonx.governance. A solution that helps direct, manage, and monitor an organization’s AI activities.

In 2016 IBM acquired the Promontory Financial Group, a global market-leading risk management and regulatory compliance consulting firm. The team at Promontory is formed of ex-regulators as well as specialists in risk and compliance. Today the company continues to work closely with regulators across the world. And the Promontory team also works closely with the newly formed Centers of Excellence, Prashant assured us.

“The Promontory team advise our colleagues on how to advise our clients on current and upcoming regulation. As well as on how to build trusted AI which complies with regulation,” Prashant added.

“Watsonx.governance ensures that you understand where the data came from, how it’s being used, how it’s making decisions. This in turn will give CEOs confidence that foundation models and generative AI can work for their businesses,” Rob Thomas, Chief Commercial Officer & SVP of Software at IBM recently shared.

The demand for AI in the UK

In order to best understand the demand for AI amongst IBM’s customers, Prashant drew attention to some use cases. “For the last six years we have been doing a lot of work with banks,” he explained.

“One of the areas which we have completed a lot of work in, is what we call the concept of conversational AI, or conversational banking,” he added.

Prashant gave NatWest’s collaboration with IBM Consulting as an example of how AI-powered, cloud-based platforms were co-created. One of the platforms, built with IBM Watson Assistant technology on IBM Cloud, is calledMarge”. It empowers mortgage call centre employees with real-time digital mortgage support for home buyers.

Prashant also added how IBM last year helped NatWest build a conversational assistant “Cora”. Cora is built with IBM Watson Assistant, which uses machine learning and natural language processing to understand user inquiries.

Additionally Prashant also shared information about how IBM has helped Nationwide Building Society, HSBC and CaixaBank. There are links with further information about these case studies at the end of our story.

These are just some of the solutions that IBM Consulting has delivered. Prashant explained how this has significantly driven productivity. Because almost 50% of customer queries and service requests can be handled by a smart agent today.

“The big benefit for the customer is how the smart agent is available 24/7. It responds to your questions quickly. You don’t have to wait on the phone for a long time to get through. And this is available now. Voice or chat,” Prashant highlighted.

Looking for Better Customer Outcomes

A lot of these new digital solutions are in line with the FCA’s 3-year strategy where financial institutions are being required to increase customer support available amongst other things.  

Prashant shared how the FCA was looking to ensure that customers get the right outcomes, especially when interacting with AI. He added how complaints were a big concern for the regulator, as well as for the customers. Resolving complaints in a timely and correct manner is one of the regulatory obligations of banks.

This is exactly why IBM Consulting is working with a number of banks on how generative AI can be used to classify complaints. So that complaints can be dealt with efficiently. Prashant believes that this can soon free up almost 40% of the time needed to handle complaints today.

This is all in order to drive better outcomes for the customer. IBM is focused on this. Through technology. By sharing knowledge of the industry. And ensuring that there is regulatory insight through Promontory.

“It is a combination of these three things that we are using to drive better outcomes for customers. But, most importantly, we are creating good use cases of AI for enterprise customers,” Prashant summarized.

How Important is Quantum Computing for IBM?

Prashant was clear in how he saw that quantum computing was still something for the future. “The way I see it. AI is here and now. Everyone is talking about it and engagements are ramping up,” he shared.

However, he did add that “quantum computing as a technology is rapidly evolving.”

Prashant pointed to recent news about how IBM used a quantum computer to solve a problem that leading classical methods couldn’t. Or to the recent unveiling of the IBM Osprey; a 433-quantum bit (qubit) quantum computer.

He also shared how IBM is currently running up to five workshops with clients about quantum computing every week in London. “There’s a huge amount of interest from our clients. HSBC are just one of the companies working with IBM on quantum computing,” he explained.

Banking clients are exploring use cases from fraud prevention to Monte Carlo simulations, Prashant added. “I think the technology, when it’s more commonly available, will be revolutionary.”

The Promise of Web3

As a technology, Prashant is very positive about blockchain and all things distributed. He believes that it “addresses some of the concerns of Web2, which is that you don’t own your own data. With Web3 there is more control over ownership of data. The concept is sound. The technology is sound.”

Prashant believes that in enterprise, use cases for trade finance, p2p lending will be some of the first that will benefit from distributed ledger technology. He also sees huge benefits in steps taken with the creation of customer digital identity.

Markets have shown that interest in AI is far higher than any other technology out there today. Cloud remains a prerequisite of any type of AI, but the cloud transformation has already taken place. The next big challenge remains AI. And IBM has certainly continued to show what an important partner it can be to the largest financial institutions today.

Prashant’s Chapter 3 is still playing out. The solutions being offered by IBM are evolving. The FCA is reacting to digital transformation. And AI needs to be used to drive better customer outcomes.    

Author: Andy Samu

See Also:

IBM Unveils WatsonX Platform – YouTube

At Your Service: “Cora” Helps NatWest Deliver Exceptional Customer Support – IBM Blog

CaixaBank | IBM

Nationwide Building Society engages IBM to assess the capability and maturity of Fully Homomorphic Encryption – IBM UK & Ireland – Blog

IBM and HSBC, promoting innovation by collaborating like a start-up – IBM UK & Ireland – Blog

‘99% accuracy simply isn’t enough’: Bain’s Jeff Tijssen on Generative AI | Disruption Banking

Lessons to be learnt from the early pioneers in the Technology Space | Disruption Banking

How IBM’s cloud makes quantum computing safe for banks | Disruption Banking

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