AI is not a competitive advantage. What you do with it can be!
- DCG
- 4 days ago
- 2 min read
The DCG advisory consulting team starts every week with an internal discussion of market trends, regulatory developments, and the real experiences of our bank and credit union clients. Here are the notes from this week’s Monday Morning Meeting.
Check out the meeting notes from previous weeks.
Do you have a question?
In this week’s meeting, the team discussed how DCG clients are integrating AI in their business practices.
Not long ago, the question was, “Will financial institutions (FIs) ever be comfortable enough to use AI?” That question has been answered and answered emphatically…..YES!
Now the question becomes whether or not they are building the data, governance, and decision frameworks necessary to use AI safely and effectively.
FIs have invested heavily in collecting data. The industry has access to a lot of it! That data in most cases is disparate, incomplete, and very messy. As such, the challenge has been turning data into actionable information and insight for strategic purposes. We see the institutions that have clean, organized data being better positioned to benefit today and going forward.
AI, like any other technology, is only as good as the data put into the model. Incorrect data will lead to incorrect models and bad decisions. High quality data, paired with advanced analytical tools and proper governance and decision frameworks, is helping position institutions to make better strategic decisions at faster speeds.
Human judgment over the top of this remains essential. AI may be accelerating analysis and uncovering insights quickly, but it cannot replace human experience, context, and strategic thinking. Think about the difference between asking the question “what happened?” versus “what is changing and what needs attention?” As AI becomes better at organizing information and identifying patterns, human judgment becomes more important, not less (a huge misconception today). AI can help identify a potential issue, but people still determine whether the issue matters, why it matters, and what to do about it.
As AI capabilities continue to evolve (daily it seems), the FIs we work with are understanding that the real opportunity is not simply generating more reports, automating routine tasks, or reducing headcount. Their opportunity is to use technology to identify patterns, surface risks, and highlight opportunities (that might otherwise go unnoticed) to take strategic action and improve the overall institution.
AI is not coming in the future. It is part of the competitive landscape today. We observe the FIs with the right infrastructure (i.e., data governance, consistency, and integrity) for current and future analytical technologies as having a competitive advantage versus those that do not. The FIs that win going forward will not be the ones with the most technology; they will be the ones that use technology to make better decisions.
What are others seeing?
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