Hummingbird: Harnessing gen AI for financial operations

In 2023, technology and money are coming together in new ways. One of the most noteworthy changes we're seeing is the increasing application of generative artificial intelligence (AI) in the financial sector. 

This particular branch of AI, which can generate outputs akin to human creativity, is poised to introduce unprecedented advancements.

FinTech Magazine speaks with Co-founder and CEO of Hummingbird, Joe Robinson, on how generative AI can impact financial operations and how financial institutions can better leverage the technology to prepare for this AI moment. 

Can generative AI help bridge the financial literacy gap?

Absolutely! One of the most significant potential benefits of generative AI is its ability to democratise financial literacy. Understanding complex financial terminology and processes has traditionally been the job of finance professionals. 

However, generative AI can boil down this complex information into user-friendly language, making it accessible to a wider audience.

Typically, when people have financial questions, they go to search engines for answers. But they’re often overwhelmed with a flood of links. 

They’re then left to wade through numerous websites, many cluttered with ads engineered to rank high in search results. 

Finding a clear answer becomes a task of sorting through an excess of information, like looking for a needle in a haystack.

Imagine if financial institutions could use a generative AI solution like ChatGPT. People could start a chat about their money matters and get quick, expert advice as if they were talking to a trusted financial advisor. And asking more in-depth questions is easy. 

For example, personal financial planning can be a complex endeavor when you think about combined households, dependents, retirement, brokerage accounts, etc. Recent advances in AI make these technologies sophisticated enough to handle nuanced situations – but they still need refinement and supervision.

An AI tool that analyses complex financial information and questions extracts the essential information, and presents it in a simple, understandable language can empower individuals to make more informed decisions. Generative AI also holds promise in improving financial education by providing tailored advice based on an individual's financial goals that they share. 

What are generative AI’s potential use cases in compliance? 

Generative AI's influence extends not only to the customers of financial institutions but also to the inner workings of the organisations themselves. It has the potential to restructure jobs within these establishments while improving efficiency, accuracy, and productivity.

Customer service representatives, for instance, could use generative AI to assist in responding to routine queries more efficiently. Chatbots are already in widespread use for this, but recent LLMs are sophisticated enough to handle much deeper nuance and complexity. The customer experience of chatbots should be greatly improved by using them.

Microsoft has demoed applications of generative AI in Excel: financial analysts could use AI tools like this to automate time-consuming tasks such as generating reports and collecting and analysing data. 

Generative AI can sift through massive datasets, identify relevant trends, and generate insightful reports, enhancing the accuracy and efficiency of financial analysis.

Financial institutions are subject to complex regulatory requirements, which can result in fines and reputational damage if they are not adhered to properly. AI-powered compliance assistants can help. 

The systems can stay updated with the latest regulations, analyse vast amounts of data to identify potential compliance issues and provide recommendations to ensure all regulations and requirements are being accounted for and followed.

How can generative AI help with financial crime investigations? 

Sophisticated criminals are very good at hiding their activities behind shell companies, long trails of misleading paperwork, and cooked books to hide the numbers. 

Recent advances in AI are exceptionally good at making connections and spotting anomalies across very large data sets. 

These technologies can transform the way financial investigations are conducted by spotting patterns and relationships to identify suspicious activity that might go unnoticed in investigations.

Moreover, generative AI could be used to simulate potential fraudulent scenarios, aiding in the development and training of machine-learned anti-fraud algorithms. It can also help in visualising complex financial networks, making it easier for investigators to understand the links between entities and transactions.

You mentioned the ever-evolving regulatory landscape, and tech-savvy criminals find loopholes to exploit a new technology. What’s a necessary next step to make sure the financial industry is prepared for this AI moment? 

While the benefits of generative AI in finance are exciting to consider, it's important to remember that this technology isn't without its unique risks. 

As we have seen with other disruptive technologies, generative AI can be exploited by criminals. For example, generative AI has already been used to create deep fake audio and video content, leading to mass deception.

Experience has taught us that professionals in finance and compliance must familiarise themselves with new technologies to stay ahead of wrongdoers. 

Strengthening our understanding and use of AI tools in tandem with advocating for robust RegTech is crucial in reducing the potential for it to be used for malicious purposes.

On the political front, some leaders in Congress are pushing for more government oversight over AI development. 

Adding to that, the White House put forth a blueprint for an AI Bill of Rights, which aims to define a set of regulations and protections for the use of artificial intelligence, ensuring its development respects individual rights, promotes transparency, and instills accountability in a legislative framework.

 While these actions have not yet resulted in official policies, they're moving in the right direction. They aim to protect people from AI misuse, without hindering the growth and evolution of this technology.

Generative AI holds great potential for use in the financial sector. As we integrate this transformative technology, the industry must equip financial professionals with efficient RegTech tools that will reduce criminal misuse.

Balancing the potential benefits with appropriate regulations will help us maximise the era of generative AI in finance. 

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