American Banker Podcast

Sid Khosla, EY Americas banking and capital markets Leader, predicts that over the next two years, 20% of generative AI cases will drive 80% of the value across financial institutions. In this podcast, he explains what those use cases are and how banks can make the most of them.

Theo Lau, co-founder of Unconventional Ventures and author of the new book Banking on Artificial Intelligence, shares a vision of how banks could help consumers navigate financial uncertainties.

It takes $50 million to $100 million dollars, three to five years of losses and a complete commitment from the board to make it as a banking-as-a-service bank, the CEO of Pathward bank says in the latest American Banker podcast. 

Rob Abrams, CEO of Mobility Payment Solutions at J.P. Morgan Payments, is overseeing the development of in-car wallet systems that turn cars into rolling credit cards. He explains his vision of what connected cars could look like and do in the future.

Valerie Abend, Accenture's financial services cybersecurity lead, explains what banks get wrong about fending off AI-based threats and what they should do instead. 

Generative AI will remove toil from our day to day jobs, argues Lukic, who is managing director and senior partner at Boston Consulting Group.

“We want to put banks in the risk management driver's seat,” says Sima Gandhi, co-founder of the Council for Fintech Ecosystem Standards, which has worked with a group of fintechs to create risk and compliance standards banks can use to evaluate their fintech partners. 

Software code generation and knowledge management are two of the places the bank has begun using generative AI to improve efficiency. 

Thomas Rudzewick, CEO of Maspeth Savings Bank worries about the growing crisis of low savings among millennials and Gen Z. He believes banks like his can help reverse this trend with financial literacy and innovative savings tools. 

The bank, which is headquartered in Pasadena, had to quickly switch to remote work for many employees and come up with relief programs for customers whose homes and businesses were destroyed by fire.

Arvind Purushotham, head of Citi Ventures, shares where he and his team see opportunities and how they vet tech startups.

A lack of resources is one common cause of AML penalties, says consultant Aaron Ansari. 

Some banks are “punching above their weight,” according to Dan Latimore, chief research officer at The Financial Revolutionist. Here's how they do it. 

Ian Mitchell, founder of The Noble, an organization that works with law enforcement and with banks to fight human crime trafficking, explains some of his group's recent work and why banks need someone dedicated to human crime.

Elder financial exploitation has been a problem for banks for years, and it's getting worse. Gunther offers practical suggestions for what banks should do when they suspect an older customer is a victim.

The Arkansas community development financial institution has an ambitious goal of making $500 million worth of mortgages in rural, minority and low-income neighborhoods.

The technology will take on routine, dull work, says Alenka Grealish, principal analyst at Celent.

Financial institutions have dramatically increased their investment and trust in large language models since 2023. Kartik Ramakrishnan, Capgemini's deputy CEO of Financial Services and head of banking and capital markets, shares the results of a recent report that analyzed these changes.

Advances in the company's AI-based lending models have made them better at predicting risk, which has led to growth, he says.

Dobrin, founder of advisory firm Qantm AI and former global chief AI officer at IBM, warns that popular generative AI models were trained on the whole of the internet and hallucinate at an unacceptable rate.

Jake Donoghue, author of the book Crypto Confidential, shares some of the worst practices he saw as a founder of a cryptocurrency company.

Karen Petrou, the managing partner at Federal Financial Analytics and a long-time observer of banking and regulation, says banks need to do far more due diligence on potential fintech partners and exert more control over these relationships.

Two veterans and executives at Armed Forces Bank – Tom McLean and Jodi Vickery – share the challenges they see their customers face and new products the bank has rolled out this year to better serve them.

Gene Scalia, the banking lobby's lawyer on retainer for a potential challenge to Washington's capital reform effort, discusses the state of administrative law after the overturning of a key legal precedent.

The Florida bank has emerged from de novo status and can now offer its solar loans in a larger geographic footprint.

Foundational models like GPT-4, the large language model behind ChatGPT, have hoovered up content from publications like The New York Times and social media sites like Reddit and OpenAI, and it faces several lawsuits because of this. John Thompson, global head of artificial intelligence at EY and author of the book Data for All, has set up what is believed to be the largest private, secure generative AI environment in the world, with focus on keeping internal data protected.

Proof of identity is critical for many things, including being able to open a bank account, get a job, or obtain health care. Yet proving one's identity is getting harder in a world of frequent data breaches. We asked Mariana Dahan, founder of the World Identity Network and chair of the Universal ID Council, what she thinks will solve this problem.

Custodia Founder and CEO Caitlin Long says the Federal Reserve has rewritten the rules around accessing the government's payments system. The central bank and a federal court judge disagree. Editor's note: This conversation was recorded on April 17. On April 26, Custodia Bank filed a notice of appeal, signaling that it will challenge the district court decision in favor of the Federal Reserve.

Banking as a service is expensive, it takes time and onboarding has to be done carefully, says the founder of Bancorp Bank, who now runs a venture capital firm that invests in fintechs. 

Cloud-based tech giants like Amazon, Google and Uber are changing the economy, and not for the better, asserts Yanis Varoufakis, a former finance minister of Greece and a professor at the University of Athens, who has written a book about the dangers of what he calls the "cloudalists."

Financial technology startups have developed some useful technology for consumers, such as automated savings, says Tescher, who founded the Financial Health Network 20 years ago. But some fintech innovations are more questionable. 

Geraldine Fleming, financial task force manager at United for Wildlife and Jonny Bell, director, EMEA, LexisNexis Risk Solutions explain how banks around the world are helping to catch criminals who illegally mutilate, kill and sell rhinoceroses, elephants, donkeys and other animals.

Eric Siegel, author of the book The AI Playbook, explains what it takes to take traditional and advanced artificial intelligence projects from idea to execution.  

The neobank doubled its membership to five million consumers and hired 200 people last year. Founder and CEO Renaud Laplanche explains how it fared during a time when many fintechs struggled.

Mike Abbott, global banking lead at Accenture, shared some of his predictions and opinions for the year ahead.

The fintech revolution has been more successful at working with banks than at trying to replace them, points out Gene Ludwig, former Comptroller of the Currency, chair of the Ludwig Institute for Shared Economic Prosperity, and co-founder of Canapi Ventures. Those with “must have” products will fare far better in 2024 than those with “nice to have” tools, he says.

It's been a rough year for fintechs and for the venture capital firms that fund them. Venture capital flows into financial technology companies dropped by 36% year over year to $6 billion in the third quarter of 2023. But Amy Nauiokas, founder and CEO of Anthemis Group, is optimistic about 2024.

Over the past year, the national bank regulators' oversight of Silicon Valley Bank, Signature Bank, Silvergate Capital and other banks that failed has been criticized. Reports of a toxic workplace at the FDIC have come to light. And the OCC hired a Deputy Comptroller and overseer of fintech who had easily discoverable falsehoods on his resume. Michele Alt, cofounder and managing director at Klaros Group, explains what this might mean for banks in the coming year.

Penny Lee, president and CEO of the Financial Technology Association and Steve Boms, executive director of FDATA NA, explain what their members like about the proposed regulation and what they would change.

Community banks sometimes feel that they lack the budget and staff to compete with larger banks and fintechs on things like mobile and online banking, virtual assistants and most recently generative AI. Jim Perry, senior strategist at Market Insights, suggests steps they can and should take to stay relevant technology wise.

The case is not really about cryptocurrency but about fraud, points out Seoyoung Kim, department chair and associate professor of finance and business analytics at the Leavey School of Business at Santa Clara University. But regulators and lawmakers are watching and the outcome of the trial will have repercussions throughout finance.

Johnson, chief experience officer at Citizens Financial Group, shares some of her concerns about advanced AI and plans to use it for purposes including contact center support and coding.

Bell, an attorney, founded Ready Life to help reduce the racial wealth and homeownership gaps by showing lenders that credit-score-less consumers have been responsible with their money, based on their daily transactions. Now he and Bernice King, Martin Luther King Jr.'s daughter, are buying a community bank just outside of Salt Lake City.

What are the best options out there for people living on the edge financially who have an emergency expense? The Global Black Economic Forum and the Center for Business and Economic Research recently completed a study called the 2023 Cash Poor Report that dives into this question.

Financial institutions can trade billions of dollars per day and handle sensitive data for millions of customers across the globe, which make them enormously attractive targets for cybercriminals. Their defenses must be top notch and ever evolving to keep up with this threat, but FIs' infrastructures are usually vast and complex, straddling old, legacy mainframes and cutting-edge, cloud-based applications that can create security gaps. Moreover, regulations mandate that some divisions within institutions are siloed from each other, which complicates communication and a coordinated defense against cyber criminals. In this difficult security environment, a hyper focus on integration is critical. FIs should look to consolidate tools to fewer vendors so they have less to manage. Many are grappling to understand their security posture and vulnerabilities, how to efficiently manage cloud-based applications, and whether they should buy or build their own security solutions. In this podcast, experts in the field will tell stories from the trenches – the good, the bad, and the ugly when protecting some of the largest, most complex networks in banking.

Though generative AI has limitations and risks, there is a cost to ignoring it, according to Ryan Favro, a managing principal at Capco.

Immersive technologies and automation are also on the list of technologies that are here, employees want them and companies like banks need to deal with them, says Phil Simon, author of a new book called The Nine: The Tectonic Forces Reshaping the Workplace.

Marisa Calderon, executive director of a nonprofit community development financial institution, explains why the wealth gap persists, for instance systemic bias in the appraisal process, and what lenders could do to reduce it.

Leaders of many of the biggest tech companies recently signed an open letter calling on all AI labs to immediately pause the training of advanced artificial intelligence systems. Seth Dobrin, advisor to the Responsible AI Institute and former chief AI officer at IBM, shares his thoughts on where banks should be careful about using AI.

Dr. Aniket Bera, associate professor at the department of computer science at Purdue University, explains how AI can be used in the financial services industry to detect when a customer is angry or depressed or even when an employee is upset or about to commit fraud.

Sumeet Chabria, founder and CEO of advisory firm Thoughtlinks and a former tech executive at Bank of America, explains some of the technology changes every bank should be making to ensure it's not the next victim of a bank run.