Kai-Fu Lee, one of the world’s foremost experts in machine learning, has praised the focus BBVA has on Artificial Intelligence during a visit to the bank’s dedicated AI unit
Dr Lee, the former head of Google in China, started his presentation by highlighting the long road of collaboration that existed between his business and BBVA. He also stated how he believed BBVA was ahead of the game when it came to delivering on the promise of AI in financial services.
He said: “I think BBVA is in great shape, as it has a leadership focused on AI, and you already have 200 or so people working on the technology and its applications in the sector. Not a lot of banks can say this.”
I think BBVA is in great shape, as it has a leadership focused on AI
However Dr Lee started his talk by explaining the fundamental differences between how China was developing AI, and how the rest of the world - and particularly Silicon Valley, were doing things.
The main difference, he explained, was the intensity with which China goes after AI development and their winner takes all mentality. By way of an example, he discussed the growth of US companies like Grubhub and Yelp - which don’t compete directly, but look to expand in their own niches. By contrast, the winner-takes-all approach in China means competition is everything - you either win or you die.
He said: “And the output of that competition is the super-app WeChat, which combines all the functionality in one - reviews, payments, restaurants, delivery - all of it. And this has pushed its parent company Tencent, towards a valuation of £500bn.”
Addressing issues around data privacy - a criticism that's been levelled against WeChat and China, Dr Lee countered by saying its not that Chinese users don’t care about privacy. Instead, it's rather that they have weighed up the benefits of privacy V convenience and they have decided the latter matters more to them because it offers deeper personalisation.
An example of this in action, he said, was TikTok. By using AI to understand what videos its users enjoy watching, TikTok is able to generate huge loyalty and stickiness from its users - and has made it arguably the world’s most valuable AI powered startup worth around $100bn.
Dr Lee then turned his attention to the future of the industry, and the technologies within the AI sector that will be game-changers.
In financial services, one area he highlighted was transformers. Transformers were developed to help with the problem of sequence transduction - or put simply, to support tasks where something is inputted into a machine, and an output is generated as a result. This includes things like speech recognition - which is critical in AI powered chatbots - like BBVA Garanti’s service Mia.
The development of AI transformers could mean that natural language models arrive faster - and in turn that could mean banks can automate more services, enabling people to benefit from convenient access to the services they want, when they want, and on the digital channel they want - from buying services to asking questions about their finances.
For BBVA, with its focus on offering customers better financial health products, it could mean customers being able to ask more complex questions about their finances to the bank’s mobile app, and the app being able to respond directly, and personally, to the customer.
Asked where he thought the potential of AI in banking lay, Dr Lee said there were several areas where the technology was beginning to prove its worth and even more areas where its potential was huge.
For example he believed AI would help - but only in a limited way - with things like corporate strategy resource management, technology management, payments and cross product support.
However at the other end of the spectrum, AI had huge potential in areas like dispute and fraud management, in webchat services, in helping in contact centre processes and in shifting through data to provide tailored, specific, insight.
The last one, as was noted in the session, is great news for BBVA, as the bank has put at the core of its strategic priorities the desire to use technologies like AI to analyse - with consent - people’s financial and non-financial data and to deliver specific and personalised insights to its customers off the back of it.
BBVA believes this added insight will help its customers enjoy better financial health by ensuring they can take actions to help them meet their financial goals earlier and more accurately.