The most forward thinking FIs are adopting Smart Agent technology—is yours?

Highly regarded analyst firm Gartner reports in their 2019 CIO Survey of more than 3,000 international executives from across industries that AI implementation grew 270 percent in the past four years, and 37 percent in the past year alone.

A quick scan of recent coverage in Fintech media shows increasing interest in the use of full artificial intelligence (AI) in financial institutions. Banks, credit unions, lenders, investment managers and payment companies all share the same challenges: money laundering, fraud, portfolio management and regulatory compliance.

Yet according to our research project with, these the banking industry is using various forms of AI and machine learning (ML) to prevent and detect these factors, but only 5.5 percent of the 200 executives we surveyed use real AI. As we’ve mentioned in previous posts, many banks and credit unions are hesitant to get on board as they are concerned about transparency, complicated processes and high cost.

What we learned from the 5.5 percent who do use real AI:

  • 64% report fewer instances of manual review, reduced manual exception management and fewer charge offs
  • 55% report fewer false positives
  • 36% report improved anti-money laundering abilities
  • 27% report decreased credit and portfolio risk, and improved borrower identification reports that AI is disrupting financial services from stock predictions and compliance to fraud prevention and risk analysis. We wondered what it would take to get the actual buy-in of the other 94.5 percent of senior banking executives we surveyed. We described Smart Agents to them: patented by Brighterion, Smart Agents are the only technology with the ability to overcome the limits of legacy ML through personalization, adaptability and self-learning. Then we asked how likely they would be to consider deploying Smart Agents in their organizations. We were surprised by some of the results.

Most FIs appear to understand that their current ML and AI systems have limitations. They plan to address those restrictions, however, primarily through further AI and ML investments

Most decision-makers still feel these systems’ benefits outweigh their limitations, so much so that 61.0 percent intend to make additional ML and AI investments over the next three years. Another 49.5 percent are planning to hire more experienced employees to help manage their current systems, and 38.5 percent intend to upgrade those systems.

A large portion of American FIs express interest in adopting Smart Agent technology, with commercial banks being the most enthusiastic

In fact, according to our research, 41.1 percent of them are “very” or “extremely” interested in adopting Smart Agents, as are 27.3 percent of credit unions, 72.7 percent of those holding more than $100 billion in assets and 48.8 percent of those with between $5 billion and $25 billion in assets.

FIs believe Smart Agents can make the greatest impact in their anti-fraud and credit underwriting business units

More than 45 percent of fraud prevention decision-makers would like to adopt Smart Agents, but FIs’ interest in doing so varies by type and size. Commercial banks are the most enthusiastic about adopting them and using them for several business units, like banking services, credit underwriting, fraud prevention and payment services, among others.

Many of the factors hindering wider financial sector Smart Agent adoption have more to do with FIs’ limitations, not those of the technology

In total, 36 percent of decision-makers in our study are “slightly” or “not at all” interested in adopting Smart Agents, with approximately 58.1 percent of this group citing that its benefits are intangible. Its other hindrances include lacking employees with the skill sets to handle the technologies (50.0 percent) and the belief that the technologies are too complicated (35.1 percent). Neither issue pertains to the abilities and limitations of AI and ML, but rather those of the FIs using such solutions.

Some FIs have adopted AI systems and are highly satisfied with their performance. In fact, those that use them tend to be more satisfied than those using any other algorithmic tool

The FIs that have already implemented AI systems are few and far between, but they cite a greater number of benefits to using them than those employing other systems. Our findings show 63.6 percent say AI solutions reduce the need for manual exception management or review, minimize fraud risk and increase customer satisfaction, for example.

Leading banks are adopting Artificial Intelligence and are experiencing the benefits. Don’t let fear hold your financial institution back—stay ahead of your competitors.

Read the full report here: AI Innovation Playbook: Moving Toward a Future of Smart Agent Adoption.