HSBC Singapore’s enhanced focus on digitising at scale

What are some examples of improved product offerings and/or enhanced customer experiences that AI has delivered so far?

In line with our strategy to innovate and deliver digital-first banking for our customers across our international network, we have been utilising several technologies including artificial intelligence (AI), big data, blockchain and cloud to improve operational efficiency and enhance customer experience.

We have been working with AI for many years with our earliest machine learning models developed a decade ago. Due to its ability to process and sort large amounts of data quickly, we have been routinely using AI to enhance our current banking operations and services. This includes automating repetitive tasks, implementing fraud detection systems, personalising our marketing efforts, and improving customer service. These efforts are aimed at reducing costs, enhancing operational efficiency, and improving customer satisfaction.

On top of using AI to optimise our day-to-day operations, one of the exciting areas in which we have been using AI is creating new customer solutions and enhancing our customer’s banking experience. One example is our AI Markets solution, a client-facing AI chatbot, which improves price discovery, client service and distribution using natural language processing. The chatbot was a breakthrough in client experience, delivering high-quality data, services, analytics, and trade idea generation in real-time.

More recently, there has been a step change in AI due to advancements in generative artificial intelligence, which has greatly improved the technology’s capabilities and accessibility. As with all new technologies, HSBC’s approach is evolving in lockstep, but always goes back to our core principle of delivering value for our customers and employees responsibly and ethically. To that end, we have over 100 Generative AI use-cases that are work in progress from risk management to managing productivity and delivering personalised customer experiences.

How will new AI developments further transform the industry or allow for different growth opportunities in the coming years?

The emergence of AI models like ChatGPT has brought the opportunities and challenges of AI to the forefront of the world’s attention. In the short term we see opportunities in three primary areas:

1. Enhancing operational efficiency: AI can streamline business processes by automating repetitive tasks, improving data analysis, and reducing human error.
2. Improving the customer experience: AI-powered chatbots and digital agents can provide personalised support, faster response times, and tailored product recommendations.
3. Enhancing risk management and compliance: AI can analyse vast amounts of data to detect fraud and financial crime, assess credit risk, and help organisations comply with regulations.

In the longer term, we see opportunities in areas such as:

1. Expanding AI-powered digital agents: We’re looking to responsibly and ethically extend digital agents to support customers navigating challenges, accessing global research, and completing tasks like onboarding or credit and lending journeys.
2. Developing advanced analytics and insights: Leveraging AI to analyse complex data sets, identify trends, and provide actionable insights for better decision-making.
3. Innovating new products and services: Harnessing AI to develop new, customer-centric financial solutions that cater to evolving customer needs and preferences.

What are the risks from wider use of AI in the financial sector, and how can these be mitigated?

As with most emerging technologies, the opportunities it brings is usually accompanied with some risk. While we are seeing some really exciting use cases for generative AI, we must at the same time ensure our resilience and security - so that we can protect our customers, our data and the bank against cyber-attacks and financial crime.

Some of the changing threats facing us and our customers because of generative AI include email and voice phishing where generative AI can be used to make phishing emails and voice messages more believable or synthetic identity fraud – a type of identity theft in which real and fake personal information is used to create a fictious identity, which is then used to commit fraud.

At HSBC, we have an established approach in managing such risk to ensure that we are delivering value to our customers and employees in a responsible and ethical manner. We do this by:

• Balancing risk and innovation: Ensuring AI deployment adheres to HSBC’s risk framework and complies with the laws and regulations across markets while simultaneously pursuing innovation.
• Achieving product-market fit: Ensuring AI solutions meet customer needs, deliver value, and are well-received by both internal and external users.
• Ethical and responsible AI use: Ensuring all AI deployments align with HSBC’s principles of responsible and ethical use, with a focus on transparency and accountability, as would be expected by the communities we operate in.

On top of our established frameworks and processes, it is also critical for users of AI to fully understand the technology and its associated benefits and risk. As part of our commitment to grow our AI and Data analytics community and to support our people at HSBC to upskill, we have signed up for the Financial Sector Artificial Intelligence and Data Analytics (AIDA) Talent Development programme launch by the Monetary Authority of Singapore in May 2023.

Finally, for AI to fully benefit the industry and consumers, the banking industry together with the regulators have to work together to ensure proper governance and accountability in the use of AI. As such, we have been partnering with the Monetary Authority of Singapore and the wider industry on the Veritas programme to co-create the first responsible AI toolkit specifically for the financial industry.

Excerpts from a media roundtable with inputs from Tancy Tan, Chief Operating Officer, HSBC Singapore. A version of this piece was first published in The Business Times on 15 November 2023.