Banking and AI: Five Practical Use Cases

Here's how bankers are using artificial intelligence to replace or streamline existing processes.

I was late to the artificial intelligence party, but I’ve arrived; Ryan Alfred is the guy who got me here. One time Harvard graduate. Seven times Ironman. Serial entrepreneur with multiple exits. Early bitcoin investor. And a tremendous friend.

Ryan is building an artificial intelligence company in the banking space. I’ve been along for the journey and spent a couple days recently with his team in Jackson Hole, Wyoming.

It didn’t take but a few minutes for me to see the absurdity of my blindness towards artificial intelligence. Since then, it’s one of the main things, aside from having fun on X, that I’ve been thinking and talking about with bankers.

I wanted to know how the community bankers are using artificial intelligence right now. In basic, tangible terms. Specifics, not generalities. So I asked a number of my friends who run banks, then used ChatGPT to distill from the conversations the five most common ways bankers are using AI.

Here’s the list…

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1. Distilling rules and regulations

Nobody gets into banking because they love Reg Z. But understanding regulatory guidance is necessary.

AI can act as a translator between regulators and bankers. Paste in new guidance from the OCC, FDIC or CFPB and ask AI to explain it in plain English. Or have it summarize the implications for a specific function, like compliance, lending or IT.

This is especially useful for smaller banks that don’t have large legal and compliance departments. In this way, AI helps to level the playing field between large and small banks. It won’t replace your compliance officer, but it gives them a new tool.