ORLANDO — In a 5,200-square-foot office in Orlando, Edison “Eddy” Ortiz and his team are building the next generation of artificial intelligence-based products for Royal Bank of Canada.
The objective is to have customers interacting with virtual tellers that will make suggestions and decisions based upon machine-based learning.
“It will allow us to provide virtual banking,” said Ortiz, a 51-year-old Ecuadorian who has worked for the company 19 years. “The goal is to have a conversation digitally as good as if you were in person.”
The level of artificial intelligence used by banks can depend upon your definition of AI. Some experts say automated decision-making on internet loan applications represents a basic level of artificial intelligence because human input drives a computer’s decision.
But as tech advocates cheer, advances in artificial intelligence could face pushback from a skeptical public. Recent surveys from firms like J.D. Power and Associates have shown that consumers prefer face-to-face communication with bank employees.
For now, though, Ortiz’s 13-person team has advanced technology in mind.
Ideally, he said, customers will be able to speak to a machine or perhaps a mobile phone to learn more about financial decisions.
Ortiz was recently decked out in blue jeans and a red T-shirt with “Google” printed across the front for an interview, appearing more like a startup company founder than a banking executive. But he has a long track record, as written up in such publications as Bloomberg News and The Globe and Mail, for developing well-known financial products — including co-inventor status on a 2012 patent application for an early digital wallet.
Two years ago, Toronto-based Royal Bank of Canada accommodated his desire to find warmer weather in Orlando. Now the office has five people with UCF connections who work on the company’s latest products.
Their biggest challenge is building an artificial intelligence product, which Ortiz has described as a “financial Siri.”
The tech targets basic functions, like checking a bank balance on a mobile app or seeking financial advice from a virtual teller.
Ortiz is in charge of selecting ideas for possible AI research, which are then approved by top brass at the bank in Toronto. He says being away from the corporate office lets young employees build without the constraints of the corporate environment.
For instance, he said, they can build products that use the latest technology and not worry about how they will apply to traditional banking.
“Some of my folks here, they have no idea what a physical bank is,” Ortiz said. “And I don’t want them to.”
The venture into artificial intelligence and similar technologies comes as legacy banks battle upstart financial services for customers, most of whom are glued to their mobile phones.
Banking recruiter Stacy Stevens said as financial institutions innovate, they must balance that with keeping enough capital on hand to operate in a much-maligned industry.
“Their profits are being squeezed,” said Stevens, who heads Orlando’s Park Avenue Group, of the traditional banking industry. “The tech piece will enhance their services but they have to invest so much to create them. The organizations are struggling with how much money to spend versus what keeps them relevant and on top of technology.”
As more technologies emerge, from digital wallets to Apple Pay, the banks are charged with trying to grow their reach.
That ultimately leads to the development of products using the newest technologies, like artificial intelligence.
“They have to find a way to protect the bank and their clients but, at the same time, they have to profit,” Stevens said.
That focus on profit is what makes consumer sentiment about tech so important. The 2015 J.D. Power Banking Satisfaction Study found 78 percent of respondents have visited a branch within the last year. Of those, the average customer has visited about 15 times.
So automated banking faces real obstacles, and would result in job cuts, financial tech expert JP Nicols said.
“We are in the early stages right now,” said Nicols, a Seattle-based consultant. “I think there are a lot of things AI will do in banking. It’s a great candidate for removing some of that overhead.”
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