[Financial IT Forum] "AI Banks Solve Problems This Fast?... They Need to Make You Think So"

Asia Economy & Financial Security Agency Hosted 13th Financial IT Forum Keynote Speech
Yoo Jung-hwa, McKinsey & Company Korea DnA (Digital & Analytics) Lead
'AI Bank for Value Creation'

Yoo Jeonghwa, Head of Korea DnA at McKinsey & Company, is delivering a keynote speech on the theme "AI for Value Creation in Banking" at the 13th Asia Economy Financial IT Forum held on the 24th at Lotte Hotel in Jung-gu, Seoul. Photo by Kang Jinhyung aymsdream@

[Asia Economy Reporter Sim Nayoung] "How flashy AI bank technology is does not matter. What matters is applying this technology in practice to create value in customers' daily lives both inside and outside bank channels. The key is to make customers think, 'AI bank solves my needs this quickly?'"

At the 13th Financial IT Forum hosted by Asia Economy on the 24th, Yoojunghwa, the Head of McKinsey & Company Korea DnA (Digital & Analytics), who delivered the keynote speech on the theme of 'AI Bank for Value Creation,' emphasized, "To achieve AI technology outcomes, it is essential to discover customer groups with similar attributes based on information such as education level, occupation, and product preferences, and propose meaningful value by sector."

Conversational UX like Bank of America's 'Erica'... Can Provide Innovative Experiences

Yoojunghwa said, "Korea's financial sector is already applying AI in various ways, from AI bankers, AI exchange rate forecasting, to AI asset management, but linking AI technology advancement to results remains a challenge for banks," and diagnosed, "To become an AI bank, five fundamental obstacles must be eliminated." He pointed out the problems as ▲unclear goals to be achieved through AI ▲lack of effort to understand customers by AI ▲only case studies without large-scale results ▲internalizing AI technology but passive about open expansion ▲AI organizations focusing solely on technology issues.

Yoo Jeonghwa, Head of McKinsey & Company Korea DnA, is delivering a keynote speech on the topic "AI for Value Creation in Banking" at the 13th Asia Economy Financial IT Forum held on the 24th at Lotte Hotel in Jung-gu, Seoul. Photo by Kang Jinhyung aymsdream@

Yoojunghwa stated that for AI banks to function properly, clear goal setting is necessary from the start. Banks must first decide the value they want to realize through AI, such as profitability improvement, providing hyper-personalized services, or increasing work processing and innovation speed.

Next, he said a 'customer relationship reset' phase is needed. Yoojunghwa explained, "Banks should predict and propose which products customers will be interested in on the bank's website, mobile app, or branches, and analyze what products customers intend to purchase not only from the bank but also from other affiliated sectors. It is important to present helpful information or services to customers simply and intuitively."

As a way to build close relationships with customers, he proposed an AI-powered 'conversational UX' with customers. He said, "Conversational UX can double the frequency of customer touchpoints and provide innovative experiences," citing Bank of America's AI assistant 'Erica' as a representative example that helps customers reduce spending and loan balances.

It is also essential for banks to make decisions based on AI. Yoojunghwa said, "Banks are identifying eight core personas?high-frequency traders, fund-focused investors, risk-averse individuals, stable investors, young affluent, pre-retirement seniors, conservative investors, and high-value potential customers?and classifying customer groups in detail to become AI (Artificial Intelligence) banks. Above all, it is important to propose the values customers want using AI technology even outside bank channels."

Increase Scalability by Introducing Cloud-Based AI Technology 'NeoCore'

Domestic banks should also learn from the 'core technologies and data' adopted by banks in advanced financial countries. Yoojunghwa said, "Leading overseas financial institutions like Lloyds Bank and Standard Chartered have introduced the NeoCore system to increase product recommendation flexibility and scale." He introduced, "Banks need to propose products responding to various variables according to changes in customer behavior, and NeoCore supports E2E (end-to-end inter-company website information or transactions) scalability using a cloud system."

The forum held at Lotte Hotel in Sogong-dong, Seoul, addressed the theme of 'Big Data and AI Strategy Directions in the Financial Sector.' After the keynote speech, strategic direction presentations from five major banks followed, including Osunyoung, Head of KB Kookmin Bank Financial AI Center (AI: Game Changer for Next Gen Banking); Kim Minsu, Head of Shinhan Bank Data Science Unit (AI-based Digital Transformation for New Banking); Shin Gyu-jin, Head of Hana Bank Cloud Division (How Far Has Hana Bank's AI Come?); Kim Jin-hyun, Head of Woori Bank DI Promotion Headquarters (Future Bank Created with Data and AI); and Kim Bong-gyu, Head of NH Nonghyup Bank NH Digital R&D Center (Financial Sector Response Strategies in the Era of Customized AI).