HSBC digital chief: 'Unbelievable opportunities' for AI in banking

Oscar Williams-GrutSenior City Correspondent, Yahoo Finance UK
Josh Bottomley, global head of digital at HSBC. Photo: Chen Xiaomei/South China Morning Post via Getty
Josh Bottomley, global head of digital at HSBC. Photo: Chen Xiaomei/South China Morning Post via Getty

Artificial intelligence offers “unbelievable opportunities” in banking, according to HSBC’s global head of digital, including help to cut costs.

“There are unbelievable opportunities for artificial intelligence and machine learning in banks,” Josh Bottomley said in a speech on Monday. “One of the reasons is actually a lot of the backends of banks are still about predicting, or preventing, or proscribing behaviour.

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“Unlike an airline, where you’ve still physically got to get a person from A to B, or a retailer, where usually there is a good that’s there, the backend processes in banking are pretty much all data driven, they’re all automatable, and they’re very susceptible for machine learning.

“There are some obvious use case and we’re looking at those.”

While AI could present new growth opportunities, Bottomley said the immediate focus would likely be on cost savings.

“Traditional banks have to lower the cost of running the bank,” Bottomley, who joined HSBC in 2013 from Google, said on Monday. “We have to get a lot better at automation, productivity improvement.”

Banks are facing huge costs pressures as a result of low and negative interest rates globally, which hurt their key business model of lending. HSBC’s interim CEO recently vowed to “remodel” the bank in the face of a “a challenging environment” and thousands of job cuts are expected.

HSBC headquarters in Kuala Lumpur, Malaysia. Photo: Lim Huey Teng/Reuters
HSBC headquarters in Kuala Lumpur, Malaysia. Photo: Lim Huey Teng/Reuters

While Bottomley was optimistic on the potential for AI in banking, he also highlighted potential pitfalls of the technology.

“There’s a whole need for governance that needs to happen — how do we make sure we don’t show some bias in the things that we do?” he said.

Goldman Sachs has found itself in hot water in the US after suggestions that a credit card it jointly offers with Apple gave different credit limits to people based on their gender. Early reporting of the incident suggests bias hardwired into the algorithms could be to blame.

Discussing banks’ use of technology more generally, Bottomley said HSBC had been playing “catch-up” in hiring for tech roles but was now “starting to hire jobs that didn’t exist previously.”

“How do we have algorithmic governance checkers?” Bottomley said. “How do we make an experience where, if you are a digital bank but suddenly you’re dealing with a bereavement, so somebody else’s bank account, or you have a parent with dementia but you don’t have power of attorney — navigating through that gets incredibly complicated.

“The skills are less about filling in the forms — the classic computer says no — it’s much more about decision support. It’s going to feel more like a therapy session, helping customers with their money, with their future and what they need.”

Bottomley’s comments came during a speech at the Fintech Talents conference in London on Monday.

Yahoo Finance UK is proud to be a media partner for FinTECH Talents — the ultimate global fintech festival in London 11-13 November 2019. There are 3,000 festival-goers + 1,500 innovators representing over 400 different financial services institutions + Rockstar speakers & steering committee members + Over 50 hours of content sessions + Game changing tech companies + The talent of tomorrow + Craft beer and live music sessions.

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