Wells Fargo appears to be taking a cautious approach to deploying Generative AI, rather than getting caught up in the hype currently exploding across many other industries.
Speaking to analysts during the bank's latest earnings call, Charles William Scharf, President and Chief Executive Officer, said it was "going to move very slowly" with GenAI.
Scharf, a former BNY and Visa boss, also revealed that discussions about the impact of GenAI are a "meaningful part" of wider tech spend prioritisation considerations.
Wells Fargo breaks AI into "different categories", Scharf revealed. "There is traditional AI and then there is GenAI," he said. "We have a huge number of use cases already embedded across the company with just traditional AI."
Wells Fargo is now using AI in marketing, credit decisions and data provision so that bankers have access to information about "what customers could be willing or might be willing to entertain a discussion about."
Fargo, its AI-powered virtual assistant, also achieved almost 15 million users and more than 117 million interactions in its first year after launch.
"In a lot of respects, that's business as usual for us," Scharf added. "The new opportunity that exists with GenAI is where AI creates something based upon whether it's public data or our own data in terms of things that haven't existed. We are most focused in the shorter term on things that can drive efficiency. But it also contributes to just quality of the experience for our customers."
The Wells Fargo boss discussed how GenAI could enable the automation of call centres but said the bank remained committed to understanding the technology's impact and did not reveal sweeping plans for its dramatic deployment.
"To the extent that they impact a consumer, we're going to move very slowly to make sure we understand the impact of that," he continued. "And so, the work is a meaningful part of as we think about prioritization in terms of our tech spend."
"Artificial intelligence could result in ineffective business decisions"
Wells Fargo took a similarly sober stance in its 2023 Annual Report, which named the "increased prevalence and availability of artificial intelligence" as one of a number of factors creating increased security risks for "large financial institutions such as Wells Fargo." The list also included "the proliferation of new technologies, the use of the internet, mobile devices, and cloud technologies to conduct financial transactions."
In the report, Wells Fargo said it used AI to help "further inform or automate certain business decisions, operations, and risk management practices, as well as to improve our customer service," but sensibly reminded us that "there is no assurance that artificial intelligence will appropriately or sufficiently replicate certain outcomes or human assessment or accurately predict future events or exposures.
"For example, the algorithms or datasets underlying our artificial intelligence may be inaccurate or include other weaknesses that could result in deficient or biased data outputs or other unintended consequences," it wrote. "Accordingly, even though we may have controls, our use of artificial intelligence could result in ineffective business decisions, operations, risk management practices, or customer service, legal or regulatory proceedings, reputational harm, or other adverse effects on our business or financial results."
It then went on to say that the long history of financial crises and subsequent regulatory reforms highlights "both the importance and some of the limitations of managing unanticipated risks."
