How AI is reshaping member relationships in building societies | FinTrends

Description

What if AI could transform the relationship between a building society and its members, without compromising trust? In this new episode of Fintrends, Dana Lunberry, Head of Data Analytics and AI at SBS, shares a concrete, brand‑led approach to AI: how data can be used to create interactions that are more useful, more personalized, and above all more reliable, at a time when fraud is on the rise and trust is becoming a true competitive advantage. An inspiring conversation on finding the right balance between AI and human interaction, when financial decisions really matter.

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Transcription

Speaker #0
Welcome to FinTrends, the podcast series where we explore the hot trends and news in the financial sector with experts. Today, I am happy to welcome Dan Allenbury, Head of Data, AI and Analytics at SBS. We are recording today a podcast episode on the very occasion of the BSA event, meaning the Building Society's annual conference, which is a key moment. for building societies to come together and talk about what really matters for their members, whether they are savers or borrowers. At the conference, Dana will be speaking about the role of AI in member engagement, how data and AI can really help create more meaningful, more personal relationships with members. So hi, Dana.
Speaker #1
Hi, Caroline.
Speaker #0
It's really nice to have you back on another FinChance podcast episode.
Speaker #1
Thank you so much for having me. It's great to be here.
Speaker #0
So before we dive in, can you quickly introduce yourself and tell us what is it that you have in your mind?
Speaker #1
Absolutely. So I have been at SPS for four years about now, and I've been in financial services almost 20, and half of that time has been in data and AI. essentially. So leading initiatives to help financial institutions really unlock the value of their data better. And so I've had lots to, I'd say, think about when it comes to what are the key problems that financial institutions have on a day-to-day basis, and really what's that intersection with data and all the techniques of data analysis, including AI. to really bring forward ways of unlocking that value. So solving the real problems that financial institutions have. So that is usually on my mind.
Speaker #0
Do you have examples of initiatives to help companies solve their problems?
Speaker #1
Yes, I'm glad you asked. At SPS, we actually have something that's incredibly cutting edge right now. So we are offering our customers. The opportunity to take the data that is generated through our SBS software and really transform that data to make it AI ready. And then we have an AI platform that's allowing our customers to then query the data they want in just natural language, right? So any kind of question they might have, they can just type it in plain English and get answers from their data back. And this is all in near real time. So within 10 seconds. They're getting right there the answers they need to make those critical business decisions that they have. And this is actually taking them from a state of being reactive in their businesses and not really knowing what decisions they can make in that moment because it takes three to five days oftentimes to get those reports back when they have a critical question to all of a sudden having the tools in their hands to answer questions on the fly. As those issues come up, right, we have the tensions arising in the geopolitical atmosphere right now where having the data in your fingertips now is more critical than ever. Your products are going to change every few hours in some cases. How do you make sure you are informed to make those decisions? So that's exactly what we're doing at SBS in really exciting times, I would say, that we can help our clients get there.
Speaker #0
So you are attending the BSA event this week. Can you tell us, for those who are not familiar with the event, what's the spirit of it and what brings people together?
Speaker #1
Yeah, so the BSA event, as you said, it's for building societies and the full industry around that. So this is really the mutual sector within the UK. So we're going to have more than a thousand people attending this event. And everyone's really there who is. really helping this industry move forward. And I say that because SBS has been part of this community for a long time, right? We've had building societies who have been clients for more than 30 years, and we've been working with them as partners. And I think half of the building societies in the UK are currently our clients, right? Using SBS solutions. So we've been heavily invested in being their partner and helping them move forward with both technology, but also innovation so that they can continue to be. really strong in their businesses and to continue to grow. And so what this event is doing is really bringing different participants like us and all the building societies and coming together to have great conversations and think about the future and really drive forward conversation that's productive and collaborative. And really, it's centered around really great values, which the building societies are really proud of. Because in case people don't realize... Building societies, they're owned by their own members. So it's a different conversation entirely than the rest of the banking industry. Their members own them, which means they're invested in local well-being, right? So how do we invest back into our communities? They're really interested in making sure that the profits that are generated from the building society go back into lowering the rates so that someone can buy. a house next to them, right? So making those mortgages more affordable. It's also thinking about transparency and the prudence of the organization. These brands are really bringing forth some of those great values that everyday people can really relate to.
Speaker #0
So you're going to have a booth and you're also going to have the chance to meet a thousand clients or a thousand people there. What are you personally hoping to get out of these conversations?
Speaker #1
Yeah, well, hopefully all will be clients by the end of it, right? All 1,000, just kidding. But yes, personally, I would look forward to the conversations, meeting a lot of the clients who I've been seeing for many years now, and just bringing that conversation to the next level in terms of how we can better listen, right? It's about what's going on in the industry. What are the concerns they're facing? What are the problems they have? And from my perspective, I'm always listening for ways that data can make their lives easier. And so that's often what I do in these types of conferences is do a lot of listening, talking to our clients. That's what I really enjoy is how do we think about solving problems, especially through the role of data and AI.
Speaker #0
So during the event, you'll be speaking about AI in member engagement. and especially the risk of prioritizing the speed over trust and confidence. So can you give us a preview of this idea?
Speaker #1
Yeah, absolutely. So really at the heart of my talk, I'm going to be talking about AI strategy and how that really has to start at the organization and who they are, right? So a little bit about those values of the building society, going back to what I just mentioned. But it's really bringing those out and teasing them in such a way that we can better understand, well, why would we use certain technologies like AI, right? How do we make sure that AI is really bringing forward those key objectives that the building society wants? And so what I'm wanting to do through this talk is to say, don't just play the fast follower that As you hear about AI in the marketplace and financial institutions focusing on operational efficiency and they're focusing on personalization, they're focusing on marketing and upselling and scaling products and all of these things, think about your organization first. Who are we? What are the areas that we want to do better that are in line with our brand and our values? And what's the role that AI could play in that? So that's really what I want to bring forward is not to say that speed and efficiency are wrong, but is that your brand? Are you being brand led when you create your AI strategy? Because that's going to be really key so that you don't end up having a situation where you're following the crowd and all of a sudden you end up facing a lot of risks and challenges because now it's moving towards drift. So they say. AI strategy without the strategy part is drift, right? So how do we bring building societies to contemplate this notion of the reason that your AI strategy is going to succeed is because it's grounded in who you are and who you are becoming through the brand as your guideline.
Speaker #0
Okay, so your point is that AI should improve the brand's value. But what is it that organizations focus on right now with AI?
Speaker #1
Yeah, so when you think about the current discourse around... AI, especially in financial services. There's so much focus on how do we make things faster or smarter, right? How do we automate the back end? How do we take away the friction? How do we start using AI in place of, many times, the humans that are sitting in the interface between the client and ourselves? So as we digitize, how do we personalize it better and automate that experience better? And so... All of this is really at the back of it is thinking about, well, what's driving those decisions? Because you have financial institutions whose shareholders obviously want things like lower cost and they want things like driving new revenues and growth. Right. So these are the types of things making the decision. But in the case of building societies, it's quite an interesting situation because they're Their owners are their own members. So it's a different conversation entirely. And so that's really what we wanted to bring at SBS to the conversation is to say, listen around, notice the types of use cases you're seeing in the market now. What actually aligns with your brand? Because it could be that you take a different path.
Speaker #0
So you said it earlier, speed, automation, personalization is positive. the word do things start to go wrong with customers?
Speaker #1
Yeah. So if you are not brand led in your AI strategy, there are risks involved, right? So we can take examples where if people are just moving forward with AI, they don't really know why they're doing it, but they're seeing everyone around them using it, they can lose sight and be distracted from what those key issues are to them. We can also be thinking of examples like Klarna, the financial institution who notoriously had let go of 700 people a few years ago. And then they realized those customer service workers were actually quite vital to the organization and their operations. And so they saw that AI couldn't actually replace all of these people. And so they started rehiring many of the people they had let go. Right. So. That's a, I think, a really telling example of how if you don't look very carefully at the role of AI and what it's good at, and also your organization and what your objectives and your values are, and you don't actually create an actual strategy in relation to the two of those, things could go wrong, right? So you need to take a step back. and put together a strategy where you are going to be very clear what is the role of AI and what's the role of humans based on our brand.
Speaker #0
What does confidence actually mean in this context?
Speaker #1
Yeah, so confidence is about a person like you and I having a trust in ourselves to make financial decisions. So in order to actually take out a mortgage, right? We have to feel a certain level of confidence in our ability to make a good decision. We should be informed to know our options, and we should also feel secure enough that we're not going to just jeopardize our future, right? So that's what confidence really is. It's a trust. It's a basic level of trust that's going to start with the individual having confidence in themselves. And then, of course, that next layer of trust has to come with the institution that they're working with. Right. So in this case, a building society.
Speaker #0
So from a customer point of view, how does trust or confidence show up or disappear?
Speaker #1
Yeah. So in relation to AI, trust and the relationship with AI is quite fragile. Right. So I think all of us have used chatbots that we thought were a disaster. Right. It's a very personal experience. you. aren't going to trust something that you feel was unreliable or hallucinated or had, you know, strange things coming back at you or didn't even give you the full picture, right? Or it felt biased. There's lots of reasons we don't trust something. So when it comes to the ways in which AI can lead to a lack of trust or confidence, we can think of real examples around technology in general as well. I was just having a chat actually with one of my friends over the weekend where she was talking about the first time, actually not the first time, one of the times she was using an ATM to deposit money. So she's a small business owner. She was depositing cash, quite a bit of cash, I think it was 200 pounds, into an ATM. And this was many years ago. And her experience was that the receipt printed from the machine. So she took the receipt and she was about to walk away, but then the machine spit out her cash again. And so she was shocked that she had the receipt, but the machine actually hadn't taken her cash. And it was from that moment on. She didn't trust technology from a bank. She always demanded, since then, this is years ago, since then, she's always demanded to see someone at a bank branch. Okay. So this is an example of trust being broken. One experience causing absolute consequences for an individual. And if you think about now, we're in a situation where fraud is an epidemic. across Europe, across the UK, the US, wherever it is. If we think about the stats in the UK, for example, I think it's nearly 50% of people aged 18 to 34 experienced fraud. They were a victim of fraud or scams in the last 12 months. Okay. That's almost 50%. Crazy statistic, but it's on the rise. This is not going away. Right?
Speaker #0
Sure.
Speaker #1
So we have a situation where trust is very fragile. And if financial institutions don't get this right, there's going to be high consequences. You and I will lose confidence in ourselves to manage our own money and to use the financial services that are being offered to us. This system is very fragile at this time. It's very hard to know the difference between a scam, a fake website versus a real website. And more and more people are falling prey and being victimized. So this is a situation where we need to, with the help of the whole industry, build products and services that are helping customers and members of building societies in this case really have the tools and information they need to build confidence and not destroy that trust and confidence. So how can they better? recognize when things are fraudulent, right? That's one simple thing that AI is actually quite good at, by the way. But you can see this, right? Where we are living in a very fragile time, things are escalating, confidence and trust is decreasing, people's habits are changing. As soon as someone experiences fraud or scams, they change their behavior. They're going to stop using certain types of payments. They're going to stop going and making investments, right? So you It has consequences. And all of this needs to be understood by financial institutions and really combated. And with the help of AI, we need to get to a better place to build confidence. And AI can do a great job at that.
Speaker #0
Yeah, from what you're saying, I get that confidence is becoming a very strategic differentiator for building societies. Can you be more concrete about what the role of AI should be compared to the role of a human being?
Speaker #1
Yeah, absolutely. Great question. So if you think about what AI is really good at, lots of things come to mind. But if we were to group them into large categories, right, we could think about analysis, right? Taking lots of data and being able to process that data and make it very concise. And then, of course, explaining, right? So. We can use generative AI and that allows us to just ask simple questions. And all of a sudden we're getting answers back in a language we recognize. We've really understood the context. We can question it back and say, well, what are we missing? So it's a tool that can really help us do brainstorming. It can help us do scenario analysis. It can help us think through some of those risks, some of those trade-offs. And so all of this explanation. that is very helpful, is a great place to think about AI and the role it can bring when it comes to building societies and what they want to do in terms of building that confidence and that trust with their members, right? So it's not necessarily using AI for now replacing the human or... putting chatbots everywhere, right? It's really about how do we make it take the information that's so complex around mortgages, right? It's not a one moment decision. You're making a decision about a mortgage over days or weeks and sometimes months in the UK. So it's one of those situations where there's so many variables involved and the complexity is so large that it's really helpful to get AI to look at all of that. data and help do some of that scenario planning. What kind of mortgage would you look for given all of these facts about my life, right? What kind of, based on the product type, based on my circumstances, based on the conditions of the market, based on the different rates that are volatile, right? So all of these things need to be looked at. And this sorts of processing of huge amounts of data is something that AI is very good at. Now, if we then look to the role of the human, right? So humans are great for many things related to that interaction with the client, right? We have mortgage conversations that are very emotional, right? So that's great for humans to really understand the big picture, understanding motivations, bringing out the types of questions that you and I would uncover through a conversation or a tea together, right? We would have... more difficulty if we brought in an AI and tried to intermediate our relationship if we were just trying to catch up. And so these are the things where there's a certain level of human respect, emotional connectedness, right? Being able to also have that authority and accountability that I would expect with the human that you would not expect with the AI, right? But these things are all going to be really key when we think about the role of humans within a financial services situation and what they can continue to bring to the table.
Speaker #0
Can you give us an example of how AI might help explain a complex situation rather than just pushing a recommendation?
Speaker #1
If I were to take a situation where building societies are giving mortgages to their members, mortgages are quite complex. So it's a case where if we could feed the AI all the data related to the customer, their profile, everything about them, their spending habits, their history, and then, of course, all of the environmental factors. So we can be thinking about the rates and the market volatility and the geopolitical tensions that are happening. you could think about the different product dynamics, so the changes in the rates, fixed rates versus tracking rates, all of these things where if you have a situation where you have all of this data, you would be able to have the AI help you make sense of it, right? So it could explain the trade-offs, this product versus this product, taking out a mortgage now versus waiting a year, right? So all of these things you could get answers to. to help you make an informed decision. And it's not to tell you what you should do, but it's to inform you so you can make comparisons and you can understand trade-offs and you can begin to see the risks better. And you can ask and interrogate and say, well, what am I missing here? Is it really that this product, maybe from this institution, would satisfy my need in the long-term, but not in the short-term? And what if I want to change? and make it a different scenario in this way, right? So the scenario analysis, again, becomes really useful when interacting with an AI and having that AI really have all the data it needs to help you know your options, be more informed, and do that brainstorming process.
Speaker #0
So on the contrary, where is it still necessary to have a human being to interact with when it comes to difficult financial decisions?
Speaker #1
Yeah, exactly. So many cases where building societies, they often cater to members who will have a unique situation. And so you will find that building societies are notorious for helping people that have otherwise fallen through the cracks, right? The underserved populations of the UK, they will feel quite comfortable going into an office at a building society. And at that branch, they can have a conversation with a human, just as you and I are doing now, and be able to explain their situation. And they might. have very good reasons why a certain financial institution wouldn't accept their request for a mortgage, whereas that building society might listen and understand the circumstances and understand how to better package something in a way that simply just a checkbox, right, would not. And so that's what you're finding is that building societies have built a brand on serving the most vulnerable. populations within the country and people that don't traditionally fall into the typical checklist that a high street bank might have for someone needing a loan or a mortgage. And so it's really those situations where you're going to see a lot of value that's stemming from that interaction.
Speaker #0
So when the disbalance is done, AI versus human being, why does it build more trust than just using more advanced technology?
Speaker #1
Yeah, great question. So the balance when it comes to the humans and the AI and really understanding their roles and then relating it back to that AI strategy that has really helped guide you to say, what does the AI do well that's going to enhance our outcomes and our business opportunities that we were driven by in terms of our values. and our objectives as an organization. So that is going to help really make the work that the human's doing all the more enhanced, right? So we say augmentation, right? You and I can be augmented by AI. We know our role as humans at the building society. Say if we worked for them, we would know this is what we do well, right? We're great at listening. We're great at having those emotional conversations with our customers were great. Really identifying, all right, who are the vulnerable populations that we need to spend more time with and come alongside. We're also great at being transparent and making sure that our members know how we're investing back into our community, right? So all of these things are going to be done on a regular basis at a building society. And it's really the role of AI that can come alongside that work and enhance it, right? So you can imagine AI. Helping bring that transparency to show exactly where are we able to make more impact within our communities? How can we use AI to highlight that impact? How can we let our customers or our members, in this case, engage with the data to dig deeper into that engagement to see, oh, look, by me taking a mortgage or maybe me putting savings into the account of this building society, I have enabled three of my neighbors within my region to also get a mortgage, right? They would feel great. That's the impact. And this can all be automated and done through AI, right? So you're able to build impact and really enhance the work being done towards those individual values that you might have as a building society in a way that is really synergetic between the human role. And of course, that technology enabling all of this.
Speaker #0
Thank you so much, Dana, for being with us, sharing your insights. And I look forward to seeing you at the BSA event.
Speaker #1
Yeah, indeed. Great to see you and looking forward to the event and seeing so many there. So thanks so much for having me today.
Speaker #0
You're welcome.

Description

Hosted on Ausha. See ausha.co/privacy-policy for more information.

Transcription

Speaker #0
Welcome to FinTrends, the podcast series where we explore the hot trends and news in the financial sector with experts. Today, I am happy to welcome Dan Allenbury, Head of Data, AI and Analytics at SBS. We are recording today a podcast episode on the very occasion of the BSA event, meaning the Building Society's annual conference, which is a key moment. for building societies to come together and talk about what really matters for their members, whether they are savers or borrowers. At the conference, Dana will be speaking about the role of AI in member engagement, how data and AI can really help create more meaningful, more personal relationships with members. So hi, Dana.
Speaker #1
Hi, Caroline.
Speaker #0
It's really nice to have you back on another FinChance podcast episode.
Speaker #1
Thank you so much for having me. It's great to be here.
Speaker #0
So before we dive in, can you quickly introduce yourself and tell us what is it that you have in your mind?
Speaker #1
Absolutely. So I have been at SPS for four years about now, and I've been in financial services almost 20, and half of that time has been in data and AI. essentially. So leading initiatives to help financial institutions really unlock the value of their data better. And so I've had lots to, I'd say, think about when it comes to what are the key problems that financial institutions have on a day-to-day basis, and really what's that intersection with data and all the techniques of data analysis, including AI. to really bring forward ways of unlocking that value. So solving the real problems that financial institutions have. So that is usually on my mind.
Speaker #0
Do you have examples of initiatives to help companies solve their problems?
Speaker #1
Yes, I'm glad you asked. At SPS, we actually have something that's incredibly cutting edge right now. So we are offering our customers. The opportunity to take the data that is generated through our SBS software and really transform that data to make it AI ready. And then we have an AI platform that's allowing our customers to then query the data they want in just natural language, right? So any kind of question they might have, they can just type it in plain English and get answers from their data back. And this is all in near real time. So within 10 seconds. They're getting right there the answers they need to make those critical business decisions that they have. And this is actually taking them from a state of being reactive in their businesses and not really knowing what decisions they can make in that moment because it takes three to five days oftentimes to get those reports back when they have a critical question to all of a sudden having the tools in their hands to answer questions on the fly. As those issues come up, right, we have the tensions arising in the geopolitical atmosphere right now where having the data in your fingertips now is more critical than ever. Your products are going to change every few hours in some cases. How do you make sure you are informed to make those decisions? So that's exactly what we're doing at SBS in really exciting times, I would say, that we can help our clients get there.
Speaker #0
So you are attending the BSA event this week. Can you tell us, for those who are not familiar with the event, what's the spirit of it and what brings people together?
Speaker #1
Yeah, so the BSA event, as you said, it's for building societies and the full industry around that. So this is really the mutual sector within the UK. So we're going to have more than a thousand people attending this event. And everyone's really there who is. really helping this industry move forward. And I say that because SBS has been part of this community for a long time, right? We've had building societies who have been clients for more than 30 years, and we've been working with them as partners. And I think half of the building societies in the UK are currently our clients, right? Using SBS solutions. So we've been heavily invested in being their partner and helping them move forward with both technology, but also innovation so that they can continue to be. really strong in their businesses and to continue to grow. And so what this event is doing is really bringing different participants like us and all the building societies and coming together to have great conversations and think about the future and really drive forward conversation that's productive and collaborative. And really, it's centered around really great values, which the building societies are really proud of. Because in case people don't realize... Building societies, they're owned by their own members. So it's a different conversation entirely than the rest of the banking industry. Their members own them, which means they're invested in local well-being, right? So how do we invest back into our communities? They're really interested in making sure that the profits that are generated from the building society go back into lowering the rates so that someone can buy. a house next to them, right? So making those mortgages more affordable. It's also thinking about transparency and the prudence of the organization. These brands are really bringing forth some of those great values that everyday people can really relate to.
Speaker #0
So you're going to have a booth and you're also going to have the chance to meet a thousand clients or a thousand people there. What are you personally hoping to get out of these conversations?
Speaker #1
Yeah, well, hopefully all will be clients by the end of it, right? All 1,000, just kidding. But yes, personally, I would look forward to the conversations, meeting a lot of the clients who I've been seeing for many years now, and just bringing that conversation to the next level in terms of how we can better listen, right? It's about what's going on in the industry. What are the concerns they're facing? What are the problems they have? And from my perspective, I'm always listening for ways that data can make their lives easier. And so that's often what I do in these types of conferences is do a lot of listening, talking to our clients. That's what I really enjoy is how do we think about solving problems, especially through the role of data and AI.
Speaker #0
So during the event, you'll be speaking about AI in member engagement. and especially the risk of prioritizing the speed over trust and confidence. So can you give us a preview of this idea?
Speaker #1
Yeah, absolutely. So really at the heart of my talk, I'm going to be talking about AI strategy and how that really has to start at the organization and who they are, right? So a little bit about those values of the building society, going back to what I just mentioned. But it's really bringing those out and teasing them in such a way that we can better understand, well, why would we use certain technologies like AI, right? How do we make sure that AI is really bringing forward those key objectives that the building society wants? And so what I'm wanting to do through this talk is to say, don't just play the fast follower that As you hear about AI in the marketplace and financial institutions focusing on operational efficiency and they're focusing on personalization, they're focusing on marketing and upselling and scaling products and all of these things, think about your organization first. Who are we? What are the areas that we want to do better that are in line with our brand and our values? And what's the role that AI could play in that? So that's really what I want to bring forward is not to say that speed and efficiency are wrong, but is that your brand? Are you being brand led when you create your AI strategy? Because that's going to be really key so that you don't end up having a situation where you're following the crowd and all of a sudden you end up facing a lot of risks and challenges because now it's moving towards drift. So they say. AI strategy without the strategy part is drift, right? So how do we bring building societies to contemplate this notion of the reason that your AI strategy is going to succeed is because it's grounded in who you are and who you are becoming through the brand as your guideline.
Speaker #0
Okay, so your point is that AI should improve the brand's value. But what is it that organizations focus on right now with AI?
Speaker #1
Yeah, so when you think about the current discourse around... AI, especially in financial services. There's so much focus on how do we make things faster or smarter, right? How do we automate the back end? How do we take away the friction? How do we start using AI in place of, many times, the humans that are sitting in the interface between the client and ourselves? So as we digitize, how do we personalize it better and automate that experience better? And so... All of this is really at the back of it is thinking about, well, what's driving those decisions? Because you have financial institutions whose shareholders obviously want things like lower cost and they want things like driving new revenues and growth. Right. So these are the types of things making the decision. But in the case of building societies, it's quite an interesting situation because they're Their owners are their own members. So it's a different conversation entirely. And so that's really what we wanted to bring at SBS to the conversation is to say, listen around, notice the types of use cases you're seeing in the market now. What actually aligns with your brand? Because it could be that you take a different path.
Speaker #0
So you said it earlier, speed, automation, personalization is positive. the word do things start to go wrong with customers?
Speaker #1
Yeah. So if you are not brand led in your AI strategy, there are risks involved, right? So we can take examples where if people are just moving forward with AI, they don't really know why they're doing it, but they're seeing everyone around them using it, they can lose sight and be distracted from what those key issues are to them. We can also be thinking of examples like Klarna, the financial institution who notoriously had let go of 700 people a few years ago. And then they realized those customer service workers were actually quite vital to the organization and their operations. And so they saw that AI couldn't actually replace all of these people. And so they started rehiring many of the people they had let go. Right. So. That's a, I think, a really telling example of how if you don't look very carefully at the role of AI and what it's good at, and also your organization and what your objectives and your values are, and you don't actually create an actual strategy in relation to the two of those, things could go wrong, right? So you need to take a step back. and put together a strategy where you are going to be very clear what is the role of AI and what's the role of humans based on our brand.
Speaker #0
What does confidence actually mean in this context?
Speaker #1
Yeah, so confidence is about a person like you and I having a trust in ourselves to make financial decisions. So in order to actually take out a mortgage, right? We have to feel a certain level of confidence in our ability to make a good decision. We should be informed to know our options, and we should also feel secure enough that we're not going to just jeopardize our future, right? So that's what confidence really is. It's a trust. It's a basic level of trust that's going to start with the individual having confidence in themselves. And then, of course, that next layer of trust has to come with the institution that they're working with. Right. So in this case, a building society.
Speaker #0
So from a customer point of view, how does trust or confidence show up or disappear?
Speaker #1
Yeah. So in relation to AI, trust and the relationship with AI is quite fragile. Right. So I think all of us have used chatbots that we thought were a disaster. Right. It's a very personal experience. you. aren't going to trust something that you feel was unreliable or hallucinated or had, you know, strange things coming back at you or didn't even give you the full picture, right? Or it felt biased. There's lots of reasons we don't trust something. So when it comes to the ways in which AI can lead to a lack of trust or confidence, we can think of real examples around technology in general as well. I was just having a chat actually with one of my friends over the weekend where she was talking about the first time, actually not the first time, one of the times she was using an ATM to deposit money. So she's a small business owner. She was depositing cash, quite a bit of cash, I think it was 200 pounds, into an ATM. And this was many years ago. And her experience was that the receipt printed from the machine. So she took the receipt and she was about to walk away, but then the machine spit out her cash again. And so she was shocked that she had the receipt, but the machine actually hadn't taken her cash. And it was from that moment on. She didn't trust technology from a bank. She always demanded, since then, this is years ago, since then, she's always demanded to see someone at a bank branch. Okay. So this is an example of trust being broken. One experience causing absolute consequences for an individual. And if you think about now, we're in a situation where fraud is an epidemic. across Europe, across the UK, the US, wherever it is. If we think about the stats in the UK, for example, I think it's nearly 50% of people aged 18 to 34 experienced fraud. They were a victim of fraud or scams in the last 12 months. Okay. That's almost 50%. Crazy statistic, but it's on the rise. This is not going away. Right?
Speaker #0
Sure.
Speaker #1
So we have a situation where trust is very fragile. And if financial institutions don't get this right, there's going to be high consequences. You and I will lose confidence in ourselves to manage our own money and to use the financial services that are being offered to us. This system is very fragile at this time. It's very hard to know the difference between a scam, a fake website versus a real website. And more and more people are falling prey and being victimized. So this is a situation where we need to, with the help of the whole industry, build products and services that are helping customers and members of building societies in this case really have the tools and information they need to build confidence and not destroy that trust and confidence. So how can they better? recognize when things are fraudulent, right? That's one simple thing that AI is actually quite good at, by the way. But you can see this, right? Where we are living in a very fragile time, things are escalating, confidence and trust is decreasing, people's habits are changing. As soon as someone experiences fraud or scams, they change their behavior. They're going to stop using certain types of payments. They're going to stop going and making investments, right? So you It has consequences. And all of this needs to be understood by financial institutions and really combated. And with the help of AI, we need to get to a better place to build confidence. And AI can do a great job at that.
Speaker #0
Yeah, from what you're saying, I get that confidence is becoming a very strategic differentiator for building societies. Can you be more concrete about what the role of AI should be compared to the role of a human being?
Speaker #1
Yeah, absolutely. Great question. So if you think about what AI is really good at, lots of things come to mind. But if we were to group them into large categories, right, we could think about analysis, right? Taking lots of data and being able to process that data and make it very concise. And then, of course, explaining, right? So. We can use generative AI and that allows us to just ask simple questions. And all of a sudden we're getting answers back in a language we recognize. We've really understood the context. We can question it back and say, well, what are we missing? So it's a tool that can really help us do brainstorming. It can help us do scenario analysis. It can help us think through some of those risks, some of those trade-offs. And so all of this explanation. that is very helpful, is a great place to think about AI and the role it can bring when it comes to building societies and what they want to do in terms of building that confidence and that trust with their members, right? So it's not necessarily using AI for now replacing the human or... putting chatbots everywhere, right? It's really about how do we make it take the information that's so complex around mortgages, right? It's not a one moment decision. You're making a decision about a mortgage over days or weeks and sometimes months in the UK. So it's one of those situations where there's so many variables involved and the complexity is so large that it's really helpful to get AI to look at all of that. data and help do some of that scenario planning. What kind of mortgage would you look for given all of these facts about my life, right? What kind of, based on the product type, based on my circumstances, based on the conditions of the market, based on the different rates that are volatile, right? So all of these things need to be looked at. And this sorts of processing of huge amounts of data is something that AI is very good at. Now, if we then look to the role of the human, right? So humans are great for many things related to that interaction with the client, right? We have mortgage conversations that are very emotional, right? So that's great for humans to really understand the big picture, understanding motivations, bringing out the types of questions that you and I would uncover through a conversation or a tea together, right? We would have... more difficulty if we brought in an AI and tried to intermediate our relationship if we were just trying to catch up. And so these are the things where there's a certain level of human respect, emotional connectedness, right? Being able to also have that authority and accountability that I would expect with the human that you would not expect with the AI, right? But these things are all going to be really key when we think about the role of humans within a financial services situation and what they can continue to bring to the table.
Speaker #0
Can you give us an example of how AI might help explain a complex situation rather than just pushing a recommendation?
Speaker #1
If I were to take a situation where building societies are giving mortgages to their members, mortgages are quite complex. So it's a case where if we could feed the AI all the data related to the customer, their profile, everything about them, their spending habits, their history, and then, of course, all of the environmental factors. So we can be thinking about the rates and the market volatility and the geopolitical tensions that are happening. you could think about the different product dynamics, so the changes in the rates, fixed rates versus tracking rates, all of these things where if you have a situation where you have all of this data, you would be able to have the AI help you make sense of it, right? So it could explain the trade-offs, this product versus this product, taking out a mortgage now versus waiting a year, right? So all of these things you could get answers to. to help you make an informed decision. And it's not to tell you what you should do, but it's to inform you so you can make comparisons and you can understand trade-offs and you can begin to see the risks better. And you can ask and interrogate and say, well, what am I missing here? Is it really that this product, maybe from this institution, would satisfy my need in the long-term, but not in the short-term? And what if I want to change? and make it a different scenario in this way, right? So the scenario analysis, again, becomes really useful when interacting with an AI and having that AI really have all the data it needs to help you know your options, be more informed, and do that brainstorming process.
Speaker #0
So on the contrary, where is it still necessary to have a human being to interact with when it comes to difficult financial decisions?
Speaker #1
Yeah, exactly. So many cases where building societies, they often cater to members who will have a unique situation. And so you will find that building societies are notorious for helping people that have otherwise fallen through the cracks, right? The underserved populations of the UK, they will feel quite comfortable going into an office at a building society. And at that branch, they can have a conversation with a human, just as you and I are doing now, and be able to explain their situation. And they might. have very good reasons why a certain financial institution wouldn't accept their request for a mortgage, whereas that building society might listen and understand the circumstances and understand how to better package something in a way that simply just a checkbox, right, would not. And so that's what you're finding is that building societies have built a brand on serving the most vulnerable. populations within the country and people that don't traditionally fall into the typical checklist that a high street bank might have for someone needing a loan or a mortgage. And so it's really those situations where you're going to see a lot of value that's stemming from that interaction.
Speaker #0
So when the disbalance is done, AI versus human being, why does it build more trust than just using more advanced technology?
Speaker #1
Yeah, great question. So the balance when it comes to the humans and the AI and really understanding their roles and then relating it back to that AI strategy that has really helped guide you to say, what does the AI do well that's going to enhance our outcomes and our business opportunities that we were driven by in terms of our values. and our objectives as an organization. So that is going to help really make the work that the human's doing all the more enhanced, right? So we say augmentation, right? You and I can be augmented by AI. We know our role as humans at the building society. Say if we worked for them, we would know this is what we do well, right? We're great at listening. We're great at having those emotional conversations with our customers were great. Really identifying, all right, who are the vulnerable populations that we need to spend more time with and come alongside. We're also great at being transparent and making sure that our members know how we're investing back into our community, right? So all of these things are going to be done on a regular basis at a building society. And it's really the role of AI that can come alongside that work and enhance it, right? So you can imagine AI. Helping bring that transparency to show exactly where are we able to make more impact within our communities? How can we use AI to highlight that impact? How can we let our customers or our members, in this case, engage with the data to dig deeper into that engagement to see, oh, look, by me taking a mortgage or maybe me putting savings into the account of this building society, I have enabled three of my neighbors within my region to also get a mortgage, right? They would feel great. That's the impact. And this can all be automated and done through AI, right? So you're able to build impact and really enhance the work being done towards those individual values that you might have as a building society in a way that is really synergetic between the human role. And of course, that technology enabling all of this.
Speaker #0
Thank you so much, Dana, for being with us, sharing your insights. And I look forward to seeing you at the BSA event.
Speaker #1
Yeah, indeed. Great to see you and looking forward to the event and seeing so many there. So thanks so much for having me today.
Speaker #0
You're welcome.

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