Preserving Core Values in the Age of AI

06/12/24

By Amy Lou Blunt, EVP and Chief Credit Officer

I was reading a research report on the top ten banking trends for 2024 that was well written and insightful. As with all the other reports recently released, it led with the ‘Age of AI’, and the transformative impact it will have on the industry, significantly increasing productivity and revenues. Time will tell.

As I read on, a subsequent trend listed made me laugh aloud. It noted that banks are realizing that people are just as important as technology. I went back and read it again, thinking I had to have missed something. I did not. It expanded the thought by stating banks are putting talent at the center of their strategies as they reimagine the future of work. At what point have people NOT been at the center of our corporate strategies? In my humble opinion, it takes no reimagining whatsoever. But if it does, shame on they who thought such a thing.

One rather hidden risk identified in the report was the rise in shadow banking. Per their research, banks hold less than 50% of global financial assets, with non-bank financial institutions holding almost 60% of the private sector’s total. At the same time, US non-bank mortgage origination has ballooned from 9% in 2010 to 62% in 2022. That represents a great deal of risk that is not monitored by federal and state regulators. Also in the risk section, China’s growing involvement in the economies of most countries warrants scrutiny.

I am sure AI will be extremely valuable in a great number of ways; risk management, compliance, technology, HR and legal were the areas noted to receive priority in this adoption of AI. However, a bank’s (company’s) culture is a reflection of its people, its talent, and its core values. There is little value in displacing these, as they bring depth and character to the workplace and to our client interaction.

This report contained a great deal of information to absorb, spark conversation, and potentially guide decision making going forward. But that “reimagine” part still gets me.