Chinese banks are rapidly implementing AI into their operations to improve efficiency and save staff expenses. The popularity of intelligent chatbots like OpenAI’s ChatGPT has led to a global trend in the usage of AI technology in banking. According to McKinsey & Co. Inc., generative AI has the potential to produce between US$200 billion and US$340 billion in yearly value for the banking industry.
AI, particularly generative AI, demonstrates versatility in a variety of financial applications. It is crucial in content creation, customer service, research assistance, marketing, product development, client acquisition, investment advising, and compliance. For example, Morgan Stanley uses OpenAI’s GPT-4 to improve its financial advice services, utilizing AI as a knowledge library.
Several Chinese banks have invested in AI tools to improve their customer service and research capacities. These include China Merchants Bank and Ping A Bank, which deploys AI-powered virtual employees for customer interactions, and the state-owned Bank of Communications, which established a research team devoted to studying generative AI.
ICBC, the world’s largest bank by assets, is aggressively investigating the use of AI language models to boost wealth management services. This involves making financial advising services more accurate and developing more effective marketing content. Since AI language models entered the Chinese banking industry, several institutions have worked with domestic AI-powered language models, such as Baidu Inc.’s Ernie Bot.
While the adoption of AI, particularly generative AI, offers significant potential, these models are not yet capable of completely replacing human equivalents, particularly in complicated and protracted phone exchanges. AI models that are tailored to the specific requirements of the Chinese banking industry and are proficient in the language are imperative.
The implementation of AI models in China’s banking industry has also raised concerns about data security and ethics. Biases in training data can still affect AI algorithms and lead to moral quandaries. As a result, there is a growing desire for regulatory norms to address these ethical concerns while still protecting data security.
Given these obstacles, it is evident that AI adoption in Chinese banking is at a critical juncture, necessitating a careful balance between emerging technology and regulatory compliance to enable successful AI integration while protecting data privacy and ethical norms.