As Citizens Bank aims to lean on technology to enable growth and shave costs, CEO Bruce Van Saun said the bank is giving a lot of thought to its strategy around artificial intelligence.
“Banks are not just banks; they’re kind of technology companies, increasingly so,” Van Saun said during a Friday presentation at a Bernstein conference.
Given the massive opportunity AI presents, the Providence, Rhode Island-based bank recently held a gathering of executives that featured a “whole afternoon segment on getting everybody up to speed on AI, so they could be more alert for opportunities about how to deploy it inside the bank,” Van Saun said.
As executives routinely consider how the bank can run more efficiently and effectively, assessing its organizational structure or vendor relationships, that increasingly means embracing new technologies, the CEO said.
With AI, “you have to walk before you run,” Van Saun said.
“We and most banks are putting the policies and the governance in place to make sure that we’re using the tool appropriately and we’re protecting data appropriately,” he said.
In the meantime, there are some straightforward applications, such as using bots to provide customers with quick answers, Van Saun said.
“That’s one that we’re pretty advanced on,” he added.
Van Saun called out other areas of opportunity the bank sees for AI use, such as assisting developers in writing code and bolstering fraud detection.
Although the highly regulated banking industry doesn’t tend to move fast, it’s a sector that’s likely to use generative AI more heavily than others, said Teuta Naghshineh, a partner at consulting firm Capco.
Companies applying AI to client-facing functions have to ensure any tools have been robustly tested, because of the reputational risk that can come with errors. The wrong answers from an AI bot can carry real financial implications, and reputation is a core component of banks’ business, she noted.
Strategy is one of the top challenges for banks when it comes to AI, Van Saun said.
“Make sure that you’re focused on the big use cases that align with your strategy, that have the maximum kind of benefits,” he said. Otherwise, “if you have a ‘thousand flowers bloom’ strategy, you’ll start spinning your wheels and you won’t actually make the real impact and harness the technology the way you should.
“Everybody wants to do something in their area of the company, and you can get pulled too thin, and then the big stuff doesn’t really advance as quickly,” Van Saun added. “I think we’ve gotten better at that, but this is just another place where we’re going to have to really focus on the things that really drive the change down the field and not get pulled in too diffuse a way.”
The bank is also working to ensure its data are structured well, to facilitate use in AI applications and in terms of how the bank serves customers and personalizes offers for them, he said.
Citizens continues to push more of the business into digital channels, too. Van Saun pointed to self-service options for customers as an example, noting it’s cheaper for the bank and tends to provide a better experience for customers.
“Looking at end-to-end journeys and trying to digitize all the way from the front to the back is a big effort that we continue to focus on,” he said.
Additionally, the bank is moving toward all of its applications becoming cloud-based. Citizens should be out of all physical data centers by the end of 2025, Van Saun said.
“There’s a huge savings potential when you achieve that,” he said.
Generally, banks’ cloud migrations are at various stages, said Glenn Kurban, a Capco partner.
It often depends on the size of the bank: Regionals and super-regionals are typically less complex than the biggest banks, for whom migration is a more arduous undertaking, he noted.
