By Drew Ianni
January 27, 2022


We’ve reached a point “where AI and machine learning are converging” and it’s helping drive operational efficiencies and customer experience (CX) innovation for a wide range of businesses. That’s how author and veteran IT expert Tom Davenport began a wide-ranging discussion about the state of AI and automation in the financial services sector at a recent virtual salon with senior industry executives. Another speaker, Rob Krugman, Chief Digital Officer at financial services firm Broadridge, said his firm is “increasingly using AI models to define and select the attributes and information that is important to their customers”.

The session was hosted by Bill Wright, Head of AI Machine Learning and Edge Innovation for Red Hat. It was moderated by CDX. The session touched on how AI and automation are driving value and customer experience innovation across financial services, as well as how the “new normal” of the pandemic is impacting the development, rollout and impact of these technologies and product innovations.

Biological Models Can Help Avoid “AI Sprawl”


Red Hat’s Wright reflected on the history of enterprise AI, saying “there were a myriad of point solutions dedicated to specific functions and departments but there was no cross-correlation… it was AI model sprawl with hundreds – if not thousands – of siloed solutions deployed across the enterprise but with no integration.” Wright said he and his clients as well as various working groups have realized that companies need a “biological neurosystem” to create a connective fabric and AI strategy across an enterprise. “We decided it needed to be based on biological systems just like the human body, where the core merges as one – a single AI intelligence model that cross-correlates different data points and delivers valuable new insights.”

Davenport worries that modern-day automation initiatives need to avoid “automation sprawl.”  He explained: “Most companies don’t have a good feel for that works well under what circumstances. Should we use RPA [Robotic Process Automation] for everything? Should we use low code? Should we use service?” He said there is a similar lack of integration when enterprises try to integrate their own proprietary AI systems and models with those from the myriad of IT vendors. Companies leveraging automation successfully, he explained, “are shifting from modes of experimentation to realization of value.” Financial services firms in particular are leveraging AI and automation to “drive behavior change of their customers, to help them live better financial lives.”

AI Success Requires Multiple Stakeholders

As the discussion continued, it became clear that successful organizations are involving non-IT executives in these projects, especially CFOs. They’re also looking outside the organization and adopting “open innovation” methods. Davenport said “the successful organizations are partnering with multiple stakeholders, including with finance and the CFO,” as well as business unit leaders, front-line workers and even customers.

The head of wealth management technology for a large New York-based financial institution said their organization is just starting to “dabble” with AI and automation: “the firm is trying to figure out what are the right platforms to leverage, the right ecosystems to engage, and the right skills we need to have within our teams – and not just in technology but across the entire wealth management business.

The consumer financial services executive explained that her company has created an intelligent automation center of excellence (COE), where key internal stakeholders can develop projects as well as engage with external partners, thinking in terms of ecosystems. “As we launched the COE, one of our goals was to make sure that all the RPA that happened across the organization was centralized, and that the COE aligned to an agile structure. Product owners from each business function own each initiative. Our risk team helps us with the guiding principles of the COE, and we have finance involved to help us validate the value that we are attempting to deliver.” She noted that the company also partners with external organizations such as Automation Anywhere and that the firm also has both an emerging technology center at the University of Illinois and a partnership with the University of Connecticut. “We continue to grow and scale our COE and, so far, we have been really happy with the results.”

Ahead – Personalization, Operational Efficiencies and TikTok


Broadridge’s Krugman said his firm is leveraging AI and automation to enhance customer communications, advice and portfolio planning. “We are increasingly using AI to define and select the different attributes and information that are most important to the customers,” he continued. He also observed that the financial services industry has always tried to deliver personalized service, although such servicing has typically been based on broad segmentation models. More recently, however, he added, “we are starting to realize that the real power of AI is its ability to democratize differentiated service and take services we typically offered our most affluent consumer segments and bring them down market.”

The head of artificial intelligence and digital workforce for a consumer financial services company added that she is focused on how AI and automation are impacting governance and regulation, and “making sure we are prepared and have the right structures in place, as we expect there is significant AI-led innovation on the horizon with respect to regulation and compliance.”

Krugman also pointed out that the “democratization of finance” is accelerating. “You can make an argument that 2021 was the year that Reddit and Robinhood and TikTok became the most important financial applications in the world,” he said. “There is a strong desire by younger generations to participate in corporate governance and change the way that companies behave, and that kind of involvement speaks to AI and its ability to identify these trends and serve as a mechanism to facilitate these actions. It’s a very, very interesting time.

Davenport closed the intensely interactive session by observing that financial advisors are always looking to offer the most relevant and timely personalized investing ideas and wealth management. “I’m most interested in how AI can help ordinary people manage their finances better”, Davenport noted, “because most of them don’t do it terribly well.”



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