Artificial Intelligence: How to Stay Competitive in the Banking World

| February 28, 2017

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When I think about artificial intelligence (AI) my mind quickly races to thoughts of a sci-fi, like future with driverless cars and C-3PO type robots (of “Star Wars” fame). With these more sensational breakthroughs coming in the near future, it is easy to overlook the other ways artificial intelligence is impacting the banking world today.

Artificial Intelligence: How to Stay Competitive in the Banking World

At the foundation of every AI program is one thing: data. Banks have been collecting and storing a wide array of data for decades. That is why the banking industry is a perfect candidate for a study on the benefits of the new concepts and technology associated with AI. Banks currently use new deep-learning concepts to help them analyze a wide array of different data sets; that assists them in making decisions on the many problems and tasks they face.

Banks today are writing computer programs that look through their customers’ online banking data for fraud and their transactional/product history for customer segmentation and sales opportunities. Banks have also begun to use AI for internal management and evaluation. The programs look through warehouses full of raw data—that’s the “learning” part of the deep-learning process. It means that these programs find a vast number of significant patterns. For instance, artificial intelligence might find that looking at their employees’ sales performance is directly correlated to their email use. This might cause a bank to create new internal expectations of their employees’ email use. In addition, AI programs can also look into internal structures and find opportunities for optimization and efficiency.

One bank that’s at the forefront of using AI to inform their business decisions is Citibank. Hidden within the data of their over 200 million customers they continue to find countless opportunities. To date, Citibank has implemented hundreds of “proofs of concepts” and “use cases” from data analytics—and they have no plans on slowing down. Especially as technological advances in computer power will allow them to make real-time decisions from live feeds of their customers’ data.

However, banks have a lead weight holding back their ability to innovate and take advantage of these new technologies: that’s the cost of maintaining their old, outdated legacy systems. A figure widely reported is that 70-80% of a bank’s entire IT spending goes to maintaining their legacy systems. That is why we’ve seen a sharp increase in the banking industry’s interest in small fintech companies and technologies. Banks are investing and partnering with third parties to utilize their technology. By skipping the often expensive and long internal research and development process, banks are investing instead in pre-developed technology. Banks are quickly learning that to stay competitive today often requires looking externally.

That’s where we at three+one come in. We have a very specific set of data-analysis tools in our tool kit that can help public and higher education clients and their banks find huge opportunities. Our liquidity analysis uncovers time-based deposit opportunities from a public entity’s banking transaction history. We have a prebuilt data-analysis solution that uses leading edge technological tools, allowing banks to keep their customers happier (with higher interest rates). It pays for itself by lowering the internal cost of their high government deposit collateral rates.

That is why many of the most competitive banks and finance teams around the country have reached out to us for help. They have found that three+one offers tools, skills, and opportunities that just aren’t available to them in-house, either due to time or capital restraints. We use the latest AI tools and make them accessible for public entities, Higher Ed institutions, and their banks. Because we work mainly with your data, we’re able to keep your internal costs low.

Maybe it’s time for you to take advantage of what artificial intelligence and our analytic tools can offer. When you’re ready to be more competitive and innovative, we’re here for you.


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NYS GFOA Annual – March 29-31
GFOA South Carolina – May 1
National GFOA in Denver – May 21
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