The
pandemic
accelerated
changes
at
big
banks,
where
Chase
and
Wells
Fargo
already
have
branches
that
look
more
like
lounges
than
banks.
But
it’s
not
just
Wall
Street-sized
banks
where
AI
is
disrupting
the
way
things
works.
Small,
independent
branches
are
also
following,
and
experts
and
executives
say
they’ll
use
their
small
size
and
agility
to
their
advantage.
The
local
bank
branch,
with
its
traditional
teller
windows
and
long
lines,
will
transform
into
an
AI-infused,
customer-centric
financial
services
center,
aiming
to
beat
the
big
banks
on
the
service
that
AI
will
allow
them
to
provide
customers.
“As
a
small
bank,
your
only
value
proposition
is
service.
Nothing
is
proprietary
anymore,”
said
Christopher
Naghibi, executive
vice
president
and
CEO
of
Irvine,
California-based
First
Foundation
Bank,
which
has
43
branches
in
five
states.
With
just
over
$10
billion
in
assets,
Naghibi
helped
shepherd
First
Foundation
from
a
single
branch
in
2007
to
its
size
today.
Naghibi
envisions
community
bank
branches
with
fewer
employees
and
more
AI.
The
employees
would
be
freed
to
help
customers
reach
their
financial
goals
and
not
be
stuck
answering
basic
questions
about
recent
transactions
and
account
information.
“The
teller
line,
as
we
see
it
today,
will
eventually
die,”
he
said.
Naghibi
isn’t
alone
among
bank
CEOs
contemplating
the
AI
future
for
financial
workers
and
customer
interactions.
Jamie
Dimon,
the
veteran
chairman
and
CEO
of
JPMorgan
Chase,
has
written
about
artificial
intelligence
in
his
annual
shareholder
letters
dating
back
to
2017.
But
his
latest
letter,
released
on
Monday,
was
notable
not
only
for
his
AI
predictions
—
he
wrote
it
could
be
as
transformational
as
the
printing
press,
the
steam
engine,
electricity,
computing
and
the
internet
—
but
also
how
he
thinks
the
technology
could
impact
the
jobs
of
the
bank’s
more
than
310,000
employees.
“Over
time,
we
anticipate
that
our
use
of
AI
has
the
potential
to
augment
virtually
every
job,
as
well
as
impact
our
workforce
composition,”
Dimon
wrote.
“It
may
reduce
certain
job
categories
or
roles,
but
it
may
create
others
as
well.”
Many
of
JPMorgan’s
AI
ambitions
are
taking
place
behind
the
scenes
rather
than
at
the
teller
window
—
it
now
has
more
than
2,000
AI
and
machine
learning
employees
and
data
scientists
working
on
400
applications
including
fraud
detection,
marketing
and
risk
controls,
Dimon
said.
The
bank
is
also
exploring
the
use
of
generative
AI
in
software
engineering,
customer
service
and
ways
to
boost
employee
productivity.
For
smaller
banks,
the
customer
interaction
may
be
the
critical
application,
with
AI
freeing
a
bank’s
resources
from
answering
routine
questions..
“This
will
be
at
the
forefront
of
how
we
engage
in
service,”
Naghibi
said.
“You
can
ask
AI,
‘Hey,
did
this
happen?
Did
this
check
clear?
How
many
payments
have
I
made
to
this
person?’
You’ll
get
answers
directly
from
AI.”
Customers
will
be
able
to
go
in
24/7
with
a
special
access
technology
and
pay
bills
by
touchscreens,
send
a
wire
at
midnight,
and
see
transactions
updated
in
real-time.
“Effectively,
a
small
bank’s
branch
will
be
a
wall
of
screens,”
he
said.
Security
will
improve
at
transformed
branches
as
paper
money
becomes
less
plentiful
and
more
locked
into
machines.
The
AI
will
bring
a
lot
more
security
to
branches
also,
with
plenty
of
cameras,
biometrics
used
for
access,
and
PIN
codes
a
thing
of
the
past.
It
will
also
help
in
more
extreme
scenarios.
“If
someone
has
a
weapon,
AI
can
automatically
see
that
it
is
a
weapon,
sense
it,
and
prevent
a
problem,”
Naghibi
said.
Jackie Verkuyl,
chief
administrative
officer
of
the
eight-branch
BAC
Community
Bank
in
Stockton,
California,
a
commercial
and
consumer
bank
with
over
$800
million
deposits,
says
implementation
of
generative
AI
is
already
well
underway
and
transforming
the
small
bank.
“The
AI
is
getting
smarter
every
day,”
she
said.
But
while
the
corner
bank
will
become
an
AI-infused
financial
services
center,
Verkuyl
says
generative
AI
will
bring
the
same
services
to
phones,
far
beyond
the
capability
of
current
apps.
BAC
uses
an
app
called
Smart
Alac
(an
acronym
for
All
Access
Connection),
developed
by
San
Francisco-based
Agent
IQ,
which
answers
customer
questions
and
matches
them
with
a
BAC
banker
who
becomes
their
assigned
point
of
contact.
“This
allows
community
and
regional
banks
to
provide
self-service
AI
and
have
a
relationship-based
banking
experience;
every
customer
has
a
primary
point
of
contact,”
said
Slaven
Bilac,
CEO
of
Agent
IQ,
a
AI-powered
customer
support
platform.
AI
distills
all
the
questions
that
customers
are
asking
Smart
Alac
and
provides
a
report
to
Verkuyl,
allowing
her
to
tailor
the
experience
more.
“We
get
lots
and
lots
of
questions
about
debit
cards,
so
we
created
a
whole
menu
that
customers
can
help
themselves
to,”
she
said.
“Chase
and
Wells
Fargo’s
advantage
over
BAC
is
the
amount
of
data
they
have.
We
can
provide
AI
benefits
without
large
amounts
of
know-how
from
BAC’s
team,”
Bilac
said.
Not
everyone
in
the
industry
is
convinced.
The
way
a
bank
controls
and
shares
large
amounts
of
data
with
AI
will
be
critical
to
effective
transformation,
according
to
Ken
Tumin,
a
senior
analyst
at
LendingTree.
Banks
have
to
give
AI
access
to
enough
data
to
be
effective,
from
account
disclosures
to
frequently
asked
questions.
“Unless
a
bank
is
committed
to
generating
and
maintaining
high
quality
and
comprehensive
data,
the
use
of
AI
in
customer
service
will
likely
result
in
more
customers
being
aggravated
than
pleased,”
he
said.
The
Independent
Community
Banking
Association,
a
trade
group
for
small
banks,
doesn’t
think
AI
can
outshine
the
human
element
in
a
relationship.
While
AI
will
be
a
significant
factor,
“it
will
never
match
the
local
knowledge
and
personal
relationships
that
are
crucial
to
helping
a
first-time
homebuyer
get
a
mortgage
or
helping
a
small
business
or
farm
finance
its
operations,”
said
ICBA
assistant
vice
president
and
regulatory
counsel
Mickey
Marshall.
But
bankers
like
Naghibi
believe
AI
will
allow
small
banks
to
become
more
involved
in
their
communities,
and
in
effect,
more
human.
“Right
now,
getting
branch
managers
to
go
out
into
the
community
and
get
business
is
tough.
We
are
not
a
large,
important
bank;
people
are
not
going
to
come
to
us.
You
have
to
go
out
and
build
relationships,”
Naghibi
said.
“If
generative
AI
is
in
place,
you
as
a
branch
manager
should
be
going
to
get
business.”
Multiple
human
and
tech-centered
connections
serve
as
“touchpoints”
to
the
consumer,
Naghibi
said,
and
“the
more
touchpoints
the
bank
has
in
their
financial
lives,
the
more
we
can
be
involved
in
their
lives.
As
a
community
bank,
that
is
where
the
edge
is.”
“Community
banking
needs
to
change;
every
single
one
of
my
clients
has
my
mobile
number,”
he
added.
“People
don’t
want
untouchable
and
unreachable.
Making
local
bankers
more
accessible
is
the
promise
of
AI.”
