Christina Russ, Truist Ventures’ Head of Strategic Initiatives, discusses four key insights at the intersection of frontier tech and banking following a recent panel discussion hosted by Truist Ventures. Acknowledgments to Lindsay Holden, Chris Ward, Jennifer Arnold, Dr. Ernestine Fu, and Bradley Kam for their contributions.
During San Francisco's TechWeek, Truist Ventures organized and moderated a spirited panel discussion, diving into the thrilling world of frontier tech - from AI and IoT to blockchain, quantum computing, and AR/VR - and their burgeoning influence on financial services.
The panel featured innovators that are building frontier tech or integrating it into the banking ecosystem. Our teammates Chris Ward from Truist Bank and Lindsay Holden from Truist Foundry shared their view from one of America's largest banks.
We also had the privilege of hosting experts from outside our organization. Jennifer Arnold, the brain behind Minerva.ai, provided valuable AI insights, Dr. Ernestine Fu, from the Stanford Frontier Tech Lab, decoded the relationship between innovation and corporate culture and Bradley Kam from Unstoppable Domains unveiled the potential of blockchain technology.
Collectively, we navigated vital questions surrounding the most promising frontier technologies, the role of corporate culture in new tech adoption, and the imminent impacts of these technologies on banking. Here's a glimpse into the key insights that surfaced:
Bullish on AI, blockchain and quantum computing
Our panel brought sharp focus to technologies poised for breakthroughs. AI, blockchain, and quantum computing emerged as the triumphant trio, gaining favor due to their maturity and proven success in some cases. Our panelists - Jennifer Arnold, Bradley Kam, and Lindsay Holden - offered compelling insights into each:
Artificial Intelligence (AI): AI is reshaping industries through intelligent automation, data-driven insights, and enhancing decision-making. But as Jennifer noted, AI's next frontier is transparency and explainability. As AI systems increasingly make decisions, it's crucial that the logic behind them is easily interpreted by people to ensure ethical use and avoid unintended consequences.
Blockchain: Originally applied to cryptocurrencies, blockchain technology promotes transparency and its ethos of bypassing intermediaries has seeped into numerous sectors. Bradley highlighted the need for evolution - making blockchain more scalable and secure, and ensuring scalability and speed in handling a surging volume of transactions.
Quantum Computing: Though now largely a research field, quantum computing has the potential to unlock unparalleled computational power. This could overhaul industries from pharma to finance. However, Lindsay from Truist Foundry pointed out the challenge - to make this fledgling technology accessible and affordable for more organizations to harness its power.
Meanwhile, IoT and AR/VR, though bursting with potential, has yet to match the business impact of AI, blockchain and quantum computing. IoT and AR/VR are relative newcomers that are still seeking scalable applications while handling growing pains.
Harnessing AI to elevate customer experience: A dance between innovation and caution
Our panel reached a consensus about AI's power to revolutionize customer experiences but cautioned a need for balance in innovation. Here's the breakdown:
Most immediate areas for AI application in banking:
- Personalization: AI, learning from individual behaviors and preferences, tailors user experiences to each customer's unique needs; a value-add becoming a customer expectation.
- Predictive analytics: AI can predict trends like customer churn or product interest with stunning accuracy, empowering businesses to proactively address issues or seize opportunities, boosting customer service and strategic planning.
- Efficiency boost: By automating routine tasks, AI frees up human resources for strategic roles, increasing operational efficiency and improving customer satisfaction. Minerva AI exemplifies this with automated, cost-effective and auditable AML investigations.
- Data bias prevention: As we harness AI, managing potential pitfalls like data bias is crucial. Transparency and accountability in AI applications are paramount.
- Transparency in use: Businesses must be upfront about AI's role in enhancing customer experience.
- Accountability for decisions: When AI drives decisions, the rationale behind them must be understood by customers and stakeholders, fostering trust in the technology and strengthening customer relations.
As AI is integrated into banking, panelists encouraged leaders to tread with caution and responsibility. An AI-infused future should embody transparency, accountability and an unwavering commitment to superior customer experience.
Embracing a culture of innovation and deft management
Our panel pinpointed two crucial elements for banks to thrive in the frontier tech arena: cultivating a culture that embraces failure and harnessing the power of savvy internal operators.
Embrace failure for innovation: To stay ahead in the rapidly evolving world of frontier, innovation is vital, and a key ingredient to innovation is a corporate culture that welcomes failure. Incumbents that see failures as steppingstones rather than roadblocks cultivate a culture that encourages risk-taking, spurs creativity and speeds up experimentation.
Leverage skilled internal operators: Deft internal operators are the linchpins who bridge the gap between current processes and the implementation of new tech. They understand the practical relevance of emerging technologies and guide their strategic application within the business. As frontier technology begins to disrupt existing internal processes, these operators help to manage the transitions, ensuring operational efficiency and aligning tech opportunities with larger enterprise goals.
A blend of a risk-tolerant culture and strategic operators is essential to navigating the frontier tech landscape. The former fuels the spirit of exploration, while the latter anchors these ventures in practicality and strategic significance.
Risk understanding: A competitive advantage in bank + frontier tech partnerships
The panel pointed out a crucial challenge for frontier tech startups: handling the multifaceted risks linked to financial services, given their limited resources and experience.
Risk management challenges for startups: Despite startups' innovative prowess and agility, they often grapple with comprehending and managing complex financial and legal risks. The constraints on their resources can result in insufficient risk management systems, creating potential vulnerabilities.
However, therein lies the competitive advantage of collaborating with seasoned financial institutions.
The power of collaboration: Banks, with their extensive risk management expertise, can provide a crucial counterbalance. For example, partnerships with experienced institutions like Truist let startups leverage deep-seated knowledge, blending innovation know-how with risk management proficiency. This dynamic fosters the creation of not just novel but also secure and reliable financial services.
Frontier tech startups and traditional banks can each benefit from the other's strengths, leading to robust, forward-thinking solutions that successfully navigate the risk landscape.
In conclusion, the panelists envision a banking future enriched and expanded by frontier technologies. At Truist Ventures, we are committed to leveraging these advancements to revolutionize the banking experience while remaining firmly anchored in our commitment to better serve our clients and communities. We champion our portfolio’s success, invest in their mission, and aim to reshape the future of finance in lockstep together. If that sounds interesting to you and you’re building in a frontier tech domain relevant to banking, we’d love to hear from you!