Revolutionizing Private Banking: One Zero Promotes AI Tools for Advisory Services
The private banking sector is ripe for disruption through artificial intelligence (AI) technologies, according to Amnon Shashua, the founder and chairman of One Zero, a digital bank that applies AI and big data tools in its services. With the bank expanding its operations outside Israel, Shashua’s enthusiasm for deploying AI tools in private banking is increasing. One Zero investors include Swiss financial institution Julius Baer, private equity firm Cerberus, and Chinese conglomerate Tencent.
AI-enhancing projects have grown with the increasing popularity of services such as OpenAI’s GPT chat and Google’s Bard. This has resulted in a substantial increase in investor interest in the sector. Large linguistic models utilized in artificial generative models can be deployed in private banking, accelerating the efficiency of relationship managers while offering services that were previously reserved for the wealthiest clients to a much broader customer base.
Shashua believes that only neobanks can achieve this due to the lack of legacy core systems, and the firm plans to apply for a license in Italy by the end of the year. In contrast to private bankers at Swiss private banks, who usually handle the affairs and portfolios of about 100-200 wealthy clients each, relationship managers at One Zero work with a maximum of 1000 clients and expect to have 2000 clients by year-end. The bank’s long-term vision is to achieve a ratio of bankers to clients of 1:10,000, providing bespoke financial advice beyond the wealthy clique to the mass rich, i.e., clients with available assets between $50,000 and $500,000.
One Zero utilizes AI capabilities to study client portfolios, which allow its bankers to provide sound advice on portfolio analytics and decision making. However, the bank is seeking even more scalability by deploying generative AI, which enables its chatbot to respond effectively to complicated client inquiries and free up bankers’ time to facilitate other tasks.
Nevertheless, there are challenges in the use of generative AI for personal financial data, including technology bias, hallucinations, and issues related to customers’ informed consent for information sharing. Overcoming these issues is crucial for companies like One Zero. Gal Bar Dea, One Zero CEO, regards tackling hallucinations and privacy issues as the two most significant challenges that the bank is likely to face. At the same time, the bank needs to ensure that the chatbot remains unresponsive to inappropriate questions like request for stock tips, the delivery of which is not permissible.
After studying mathematics and computer science at Tel Aviv University, Shashua founded several AI-based companies in natural language learning and robotics. However, his most significant achievement was co-founding Mobileye, a self-driving car company that Intel acquired in 2017 in Israel’s largest deal. Although Shashua is not inclined to discuss potential mergers and acquisitions, he holds a robust interest in technology, stating, “Once the technology is gone, I’m not a banker.”
Summary:
Israeli digital bank One Zero is embracing artificial intelligence (AI) technologies to meet the mass-rich’s financial needs. Founded by Amnon Shashua, One Zero uses linguistic models to offer asset management services that match the portfolios of wealthy clients. Aiming to expand its operations outside Israel, the bank is set to apply for a license in Italy at the end of the year. Investors in One Zero include Swiss private bank Julius Baer, private equity firm Cerberus, China’s Tencent, among others.
One Zero’s approach brings a breakthrough into the private banking world by increasing the efficiency of relationship managers and offering bespoke financial advice to a more extensive clientele. Unlike private bankers at Swiss banks who handle portfolios for about 100-200 wealthy clients, One Zero’s relationship bankers work with up to 1000 clients each and expect to handle up to 2000 by year-end. The bank’s long-term vision is a ratio of 1:10,000 clients to bankers where asset management can be delivered beyond the wealthy class to the mass-rich with assets between $50,000 and $500,000.
One Zero deploys AI models in analyzing client portfolios to help bankers in offering top-notch advice on portfolio analytics. The bank is gradually implementing generative AI, enabling its chatbot to respond expertly to clients’ complex queries, freeing up client-facing bankers to perform other tasks. The bank is nonetheless mindful of the challenges posed by generative AI, such as technology bias, hallucinations, and issues related to customers’ informed consent for data sharing.
Gal Bar Dea, One Zero’s CEO, identifies handling hallucinations and privacy issues as the two most significant challenges that the bank faces in developing and deploying its generative AI chatbot. With the difficulty of preventing the chatbot from perpetrating inappropriate answers like providing stock tips, One Zero will focus on overcoming the challenges to help enhance user experience.
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AI tools are “ripe” to disrupt the private banking sector, Amnon Shashua said, as his new digital bank One Zero prepares to expand its operations outside of Israel.
Shashua last year launched One Zero – whose investors include Swiss private bank Julius Baer, US private equity group Cerberus and China’s Tencent – as the first new Israeli bank to be formed in more than 40 years, and is planning to apply for a license in Italy by the end of the year.
The feat is one of several AI-enhancing projects spawned by the 63-year-old computer scientist, who co-founded and still leads self-driving group Mobileye, and comes as the hit of a new wave of smart products. artificial generative, such as HOW OpenAI GPT chat and Google’s Bard, has sparked a frenzy of investor interest in the sector.
Shashua said deploying TO THE technologies, such as large linguistic models, in private banking would radically increase the efficiency of relationship managers and make it possible to offer services previously accessible only to the wealthiest to a much wider selection of customers.
“This is really a break in the banking world,” he said in an interview with the Financial Times. “And you can only do that at a neobank because you don’t have the legacy core systems.”
Relationship managers at Swiss private banks, which dominate the global wealth management industry, typically handle the affairs of around 100-200 wealthy clients each.
One Zero’s Israeli business, which has acquired 60,000 client accounts since its launch last summer, has 1,000 clients per relationship manager and expects to reach 2,000 by the end of the year.
But Shashua said the firm’s long-term goal was a 1:10,000 ratio, allowing One Zero to provide services previously only accessible to very wealthy clients, such as bespoke financial advice, to a wider market.
“The plan is to be the first pure play pan-European digital private bank for the mass rich,” he said, referring to clients that One Zero characterizes as having available assets of between $50,000 and $500,000.
One Zero — which raised $250 million and was valued at $385 million in its latest funding round in February — uses AI to analyze client portfolios and provide bankers dealing with them with advice to share.
But Shashua said he expects the biggest gains in scalability to come from implementing generative AI, the powerful technology behind services like Chat GPT – to enable the One Zero chatbot to respond to sophisticated customer inquiries and free up bankers’ time for other tasks.
“If people aren’t getting answers, they feel like they’re not being served, so you need to manage that through human bankers or automation,” he said. “The Rise of Language Models. . . is ripe to create this automation.”
Many banks are already using chatbots to deal with customers, but the range of questions they can answer is limited by the fact that they generally work by giving customers a choice from a pre-determined set of questions, rather than responding to free text.
Nizan Geslevich Packin, a commercial law professor at the City University of New York, said that generative AI has the potential to improve how efficiently banks can deliver certain services.
But he added that applying it to personal financial data posed a number of challenges related to technology bias and a tendency to “hallucinate” — when AI confidently gives inaccurate answers — as well as issues related to customers providing informed consent. for the use of their information. “We’re still in the early days of trying to figure out what that means,” she said.
Gal Bar Dea, chief executive of One Zero, said tackling hallucinations and data privacy issues were the two main challenges the bank faced in developing its generative AI chatbot, as well as making sure it was unresponsive to questions, such as requests for stock tips. that he wasn’t allowed to. But he said it was already being tested internally and that the bank plans to roll it out for customers “in the coming months.”
After studying mathematics and computer science at Tel Aviv University, Shashua founded companies applying artificial intelligence in areas ranging from robotics to natural language learning. His biggest success, however, was Mobileye, which Intel bought in 2017 in the largest deal in Israel’s history. prior to listing last year.
Asked if he would consider selling One Zero, Shashua said it was “too early to talk about mergers and acquisitions.” But he wasn’t committed to the future. “My interest is technology,” he told her. “Once the technology is gone, I’m not a banker.”
https://www.ft.com/content/57de15ca-09e5-444b-937b-ac048c1cc791
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