Banks must promote more research on AI usage, says SBI’s CTO

Banks are striving to become more digitally advanced by revamping their systems – right from the core to the front-end – using AI and other tech.

Banks and financial institutions must promote research on the use of artificial intelligence to ease their workload, an official from India’s largest lender said, as automation evolves from handling basic customer queries to facilitating more complex transactions such as digital payments.

“There is a need to promote more AI research and researchers in the banking and finance sector,” Balaji Rajagopalan, chief technical officer at the State Bank of India, told Moneycontrol on the sidelines of the Global Fintech Festival in Mumbai on September 5. He explained that advances in AI technology can facilitate and ease manual workloads at banks and financial institutions.

Many banks have introduced chatbots on their websites and apps that are used mainly for basic communication and handling customer queries. ICICI Bank’s chatbot, called iPal, guides visitors on the website to service options. HDFC Bank’s Eva chatbot assists website visitors with complaints and other services.

As the capability of chatbots advances, regulators are bringing in norms that will allow more complex transactions to be automated. The Reserve Bank of India proposed in August enabling conversational AI-based payments on UPI. This will allow users to talk to AI-powered systems to make payments.

Also Read: RBI may use AI in conversational payments on UPI

UPI, or United Payments Interface, is a platform that facilitates instant money transfers between bank accounts.

Core issues

The State Bank of India has set up institutional centres to develop AI products. Bank of Baroda has introduced gadgets and machines at its branches to provide account details and offer other services.

Meanwhile, Axis Bank may look at using ChatGPT’s enterprise version, said Sameer Shetty, president and head of digital business and transformation at the private lender.

“We may look forward to working on use cases to enhance communication with customers using ChatGPT’s enterprise version,” Shetty told Moneycontrol.

ChatGPT is an AI chatbot that responds to queries based on the information it is given and the vast amount of data that it’s been trained on. It interacts with users in a conversational way. Global banks JPMorgan and Deutsche Bank plan to use ChatGPT-like chatbots and AI models.

Lately, banks have faced issues with their digital offerings such as disruptions in internet banking or app-based transactions. Experts said these problems lie mainly in their core systems.

Rajagopalan said SBI has evaluated these problems and is working on revamping its technology – from the core system to the front-end model. However, there is a scarcity of the talent required, he said.

“We are constantly looking for and hiring talent in the technical banking space, but there is some struggle to get hardcore tech officers,” Rajagopalan said.