01.07.2024

Revolutionizing Financial Services: How Generative AI Will Transform ACTICO’s Solutions

The financial services industry is on the cusp of a technological revolution with Generative AI. By enabling the next level of intuitive data interaction, streamlined decision-making, and enhanced compliance, Generative AI is set to transform how banks, financial institutions, and insurance companies operate. ACTICO is committed to integrate generative AI responsibly into our platform and solutions, offering unprecedented efficiency enhancements in alignment with regulatory requirements.

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Understanding Generative AI

Generative AI represents a significant advancement in computational methods, mimicking human thinking more effectively than traditional programs. Embedded in software systems, it can analyse complex financial data, generate meaningful insights from unstructured data, and create comprehensive texts. With simple natural language commands, Generative AI makes data retrieval and summarization practical and efficient.

To translate computer data into human words, generative AI uses large language models (LLMs). These models help the AI understand the context and meaning of words and use them correctly. In practice, the AI learns through extensive training datasets.

Mastering the fine-tuning of generative AI demands a careful balance: it involves enhancing operational efficiency while establishing stringent rules to verify the accuracy of outputs, ensuring full compliance with regulatory frameworks and business-specific requirements. As a result of this meticulous fine-tuning, the generative AI capabilities within ACTICO’s software will be designed to simultaneously boost productivity and adhere strictly to the financial sector’s regulatory demands.

Benefits of Generative AI for Financial Services

Financial institutions have been using AI for a long time. Machine learning helps identify patterns in data and draw conclusions for investment decisions, ROI analyses, fraud detection, and more. Aggregating, analysing, and preparing data in written form, however, still requires a lot of work from specialized departments.

Generative AI has the potential to changes this dramatically. It enables the next level of intuitive interaction with data and redefines how banks and insurance companies will use software across their operations. Human experts can simply use verbal commands for search and operation processes, saving many steps and increasing efficiency.

Instead of flipping through annual reports and scrolling through PDFs, analysis teams will be able to obtain information more quickly and productively . They can simply pose their questions in natural language, and a generative AI-powered program provides the answers in a formatted text. If desired, the AI can bundle aspects into lists and summarize them into a narrative. This makes it easy to process information for various purposes.

Operating complex software functions will also become simpler. Modelling can be initiated or adjusted through verbal instructions – the AI creates the corresponding formulas and rules.

Crucial Aspects to ensure Regulatory Compliance with Generative AI

Despite its great potential, it is essential for financial institutions to ensure the compliant implementation of AI-powered applications. Two aspects are crucial.

First, AI-generated results must be binding and reproducible, a key principle in banking regulation. Applications must ensure consistent answers, considering query context.

Second, AI training and queries must protect private and sensitive data. ACTICO Software will meet these requirements by setting guardrails for data access in the AI infrastructure. The planned new AI features from ACTICO will ensure compliance with these guidelines.

Explore how generative AI will boost productivity without compromising regulatory compliance through these three concrete examples.

Enhancing effective Knowledge Management with AI Chatbots

The expertise and productivity of professionals make the difference in a competitive environment. The ACTICO Chatbot, powered by generative AI, will aid professionals in maximizing the efficiency of the ACTICO platform. The chat will assistant accesses the entire knowledge base about the platform’s functionalities, including manuals, whitepapers, and FAQs.

The chatbot will provide the User with precise and understandable information about the platform’s features at any time. A source reference allows further exploration of the knowledge if needed. This ensures that knowledge levels remain ‘up to date’ – no matter how dynamic the market and the platform’s feature set are.

Being available around the clock, staff can seamlessly continue their tasks without needing external support for operational questions. This reduces interruptions and promotes efficient workflows.

The knowledge aid will be intuitive that it integrates seamlessly into daily office operations – regardless of whether the User has prior experience with modern AI chatbots. The ACTICO Chatbot will be based on a powerful natural language processing model. It intuitively understands questions and prepares complex knowledge into clear answers. If the exact term escapes the user’s memory, a description suffices – the chatbot system still grasps the context. This is the major advantage of generative AI.

The chatbot will be provided as a software-as-a-service and is accessible through a secure area of the ACTICO website in any standard browser. This allows it to be quickly and easily integrated into any IT environment. The robust cloud infrastructure from AWS ensures responsive, high-availability operations with high IT security standards.

Financial institutions will gain a knowledge center with the ACTICO Chatbot that makes valuable know-how available much faster, more sustainably, and cost-efficiently than traditional support measures and training tools.

Streamlining Decision Rule Modeling

Modeling rules for automated credit approvals or other business decisions is a core feature of digital banking. With a new generative AI-based function integrated into the ACTICO Modeler, financial institutions will be able to significantly speed up this complex process. Instructions in natural language are sufficient to implement target specifications or optimize existing rule sets, making it easier to continuously adapt decision models to market dynamics.

The ACTICO Modeler will offer an input interface where requirements for the model can be formulated in natural language. The software then automatically translates the instructions into a detailed rule set. Alternatively, the requirements can be matched step-by-step with the decision tree settings in a guided dialog.

The ACTICO Modeler maintains access to an extensive collection of proven rule models. The choice of which model to use and its business requirements are always transparent.

The instructions for the AI can be given in any standard browser. The seamless interaction between the underlying language model and rule creation in the ACTICO Modeler is ensured by the ACTICO Cloud, based on the robust infrastructure of AWS.
Financial institutions will benefit from the integration of generative AI in three ways.

First, it makes changing complex rule models more accessible to teams whose expertise lies in analysis rather than modeling. There’s no need to bring in specialized experts.

Second, this boosts efficiency. Besides reducing the need for personnel, the time required decreases as well. Automatic modeling significantly shortens the time until new decision rules are applicable.

Third, it enhances innovation capability. New target groups and financial products can be addressed more easily and successfully when decision models can be intuitively backed and optimized without significant lead time.

Facilitating Compliance and Reporting

With generative AI from ACTICO, compliance officers will be able to automate time-consuming research and complex reporting tasks. This will be particularly helpful when reports on e.g. anti-money laundering cases need to be created for Financial Intelligence Units of regulatory authorities. Compliance teams must provide and comment on legally relevant material. The generative AI tools from ACTICO will help compliance teams filter relevant information from complex datasets, assess the findings, and summarize them in text drafts.

Instead of manually reviewing documents, bank professionals can enter a search query in an input mask in the form of one or a few sentences in natural language. The AI searches the available datasets and outputs the results on the screen. Based on this, the AI provides a draft for the regulatory report.
By eliminating many manual steps, the time required for compliance teams to handle a case will be significantly reduced. A time saving of up to 30 percent is realistic. This not only saves time and costs but also ultimately facilitates compliance with regulatory requirements.

Outlook: The Future of Financial Services with ACTICO and Generative AI

Generative AI opens powerful efficiency potential for banks and insurance companies. Its intuitive and context-sensitive operating concept will speed up the interaction with financial data and software programs.

The language understanding of this new evolution of AI transforms individual data points into immediately usable insights in text form. This shortens research times and increases productivity in many areas where quick and informed human decisions make a difference and lengthy research and documentation consume valuable time.

Operating with natural language provides an easy-to-access interface for complex software functions. It allows small commands to move big things. Modeling automated decision rules at a much faster pace makes financial institutions more agile and competitive in a dynamic market.

Implementing AI applications in compliance with regulatory requirements must not be overlooked. With the Focus of ACTIO to regulated industries, the ACTICO platform will harmonize the potential of generative AI with the requirements of the highly regulated Banking, Financial Services, and Insurances Sector.

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