Standard Bank is happy to be a “fast follower “on artificial intelligence (AI), the group’s chair, Nonkululeko Nyembezi, has told shareholders.
In her letter to shareholders published in the group’s annual report published on Friday ahead of the AGM set for June, Nyembezi said the board was seized with how AI was affecting the industry and how the company was responding to it.
“During the year, the board dedicated time specifically to an in-depth discussion of the risks and opportunities presented by AI in financial services, including generative AI,” Nyembezi said.
“The board is comfortable with the group’s chosen AI-related approach as a fast follower, and with the guardrails it has adopted in the principles, policies and processes in relation to AI.”
Discovery Bank last week upped the ante in the deployment of AI in the sector. The bank said clients would be able to access its “Discovery AI” through its WhatsApp channel.
The function will see clients interact with Discovery AI through text, voice notes or images “to get tailored answers around their spending and savings patterns, understand their accounts better, and get suggestions to budget effectively and maximise product features and rewards”.
Credit agency S&P a few months ago said it expected testing of generative AI solutions in the banking sector will accelerate over the next two to five years, while benefits were likely to prove incremental.
Banks worldwide are adopting generative AI, which promises earnings growth, improved decision-making and better risk management. But S&P has warned that AI also comes with new risks, concerns and costs that banks will have to manage.
One of the risks flagged by S&P is ethical concerns, such as the ability to explain generated content or biases embedded in data. Other AI risks that are particular to the banking sector include security and privacy, as well as issues related to workforce displacement.
A working paper by the Centre of Excellence in Financial Services warns that the deployment of AI in SA’s banking system might perpetuate racial biases, calling for industry players to take steps to prevent this and other ethical challenges brought by the technology.
“Some research explores how AI systems embed and perpetuate racial biases. Beyond the data itself, subjective and unconscious biases in AI reflect deeper societal inequalities, often overlooked in approaches that treat bias as a purely technical problem,” the paper reads.
“These systemic flaws affect automated decision-making systems, even within the financial sector, which, without careful ethical consideration, can replicate and amplify structural racism,” it said.
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