Varghese Abraham: «A Guide to AI-first Banking»
How can the power of Artificial Intelligence be utilized to leap forward? Which factors will lead to success, and which will reduce acceptance? These are the big questions managers and companies must ask themselves. An AI-first strategy offers a possible solution, Varghese Abraham writes in his article for finews.first.
finews.first features commentary on economic and financial topics.
Banks are in a difficult situation. Earnings are shrinking, while at the same time, customers are becoming increasingly demanding, and payment services such as PayPal are steadily taking up more market share.
The AI-first strategy increases the chances of raising profits and keeping pace with the digital challenges of the market. Among other things, AI agents play a key role here.
«AI-first means fundamentally changing the way a bank works»
But AI-first doesn't just mean using AI tools; it means fundamentally changing the way a bank works, thinks, and plans for the future. The six key components that are directly affected are:
- Strategic decision-making and business processes: AI enables informed, forward-looking decisions and the development of new products and services through scenario modelling and predictive data analysis.
- Customer experience and service improvement: AI creates personalized, responsive customer experiences – from advice to account management. Synthetic customers with design personas that use factual knowledge and personality traits from the customer base can create offers and support employees.
- Operational efficiency and automation: Agent-based AI automates processes such as transaction processing and project management. It reduces error rates in routine banking transactions and increases efficiency and customer satisfaction.
- Risk management and compliance: AI improves credit checks, detects fraud in real time and supports regulatory compliance through automated monitoring.
- Security and data protection: AI actively strengthens data protection and customer trust through intelligent access systems, vulnerability analyses and threat detection.
- Organizational culture and human resources: An AI-first approach requires an innovation-driven culture. Training helps employees use AI systems effectively.
The best way to introduce an AI-first strategy is to start small and think in stages. In general, this means prioritizing internal areas with high relevance and only scaling externally once implementation has been successful. AI products should also be tested on a small scale first and then rolled out gradually.
«Another principle is to make small, incremental improvements»
The principles behind this approach include starting with small projects in a so-called AI forge to promote innovation and enable the industrialization of AI processes throughout the company. A cross-functional ethics committee is also recommended to ensure a structured approach to the responsible use of AI.
Early dialogue with employees, customers, and authorities is important because it ensures transparency, builds trust, and takes different perspectives into account. This also includes continuous feedback loops with customers and stakeholders to ensure ongoing optimization of the systems.
Another principle is to make small, incremental improvements, as these enable controlled AI integration with lower risks. Finally, all AI initiatives should be clearly aligned with the organization’s values to ensure ethical consistency.
«The path to AI-first is complex»
By implementing these steps, a bank can execute its strategy to become AI-first responsibly and ethically. The emphasis on micro-changes allows for consideration of the ethical implications of AI and ensures that the bank's transition to AI-driven operations is both successful and responsible.
The path to AI-first is complex, and many processes and experiences will change over time. AI-first means not only technological transformation, but also a change in ethics, corporate culture, and HR strategy.
This sets the stage for a more inclusive, adaptive, and forward-thinking future of banking – a vibrant AI-first organization that is continuously evolving and able to adapt to new knowledge immediately.
Varghese Abraham is a Consulting Leader, Enterprise AI at Infosys Consulting.
