Despite the buzz surrounding AI giants like Google, Amazon, Nvidia and OpenAI, the technology is still in its early stages and financial institutions should be wary of the hype, particularly amid a shifting regulatory landscape.
“I anticipate that in the next year, there’s going to be some challenges that generative AI and agentic AI will face, which I think will be great for the long-term prospects, but … maybe stunt some of the momentum and some of the aggressiveness that we see people going with,” Russell Barrett, executive vice president and chief operating officer at Valley Bank, said during the Bank Automation News webinar “Emerging fintechs: New technologies you need to know now” on April 8.
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The $62.4 billion Valley Bank has focused on using AI for anti-money laundering and compliance, Barrett said.
For example, Valley has been using Tara, an AI AML agent from digital solutions provider WorkFusion, since early 2024, the bank previously told BAN.
“Banks are heavily regulated, and for good reason,” Barrett said. “And what that means is that, in terms of most of the use cases we’re working on, the AI is meant to be assistive.”
Jeff Flynn, director at Citi Ventures, the venture capital arm of $1.7 trillion Citi, agreed.
There are no AI decisions being made at Citi, “that I’m aware of,” he said during the webinar, adding, “It’s completely an assistive tool.”
Grounding expectations
Big tech is setting narratives about the state of AI that are unrealistic, Kevin Green, chief operating officer at AI-powered decisioning platform Hapax, said during the webinar, echoing Barrett and Flynn.
Major AI players, including Google, Amazon and ChatGPT may not always be the leaders in specific use cases. So FIs should carefully consider startups offering specialized solutions, said Brandon Min, founder and chief executive at Herd Security, which specializes in AI voice detection.
Regardless of its AI strategy, it’s paramount for FIs to make decisions based on due diligence, not hype, Hapax’s Green said.
“I think there is going to be a little bit of a backlash in terms of the AI, and I think a lot of it comes from people who have made rash decisions.”
— Kevin Green, COO, Hapax
FIs must have a long-term strategy when it comes to AI deployment because the technology is still evolving. “This is a marathon, not a sprint,” he said.
“It’s really important for people to look at AI, not as just another point solution that I can plug in and check the box to solve the problem, Green said. “You’ve got to commit to this. This is something that needs to be at the center — not only of your tech strategy — but your overall business strategy.”
