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Denmark’s Danske Bank is working with IBM to apply machine learning to predict and fix IT problems before customers experience problems.
With IT outages regularly causing downtime for mobile banking apps and online banking systems, banks’ reputation among customers is at stake as they increasingly promote digital channels.
Within minutes of a banking system going offline, a Twitter storm erupts, with customers rightly complaining that they are unable to bank. Meanwhile, banks are closing branches, where customers can normally go as an alternative to digital banking. And there will come a point when customers have had enough and will look for a new bank.
Danske Bank said the aim of its artificial intelligence (AI) project with IBM is “to be one step ahead and avoid incidents which affect the customers negatively”.
The bank is using IBM’s Predictive Insights, which it is currently calibrating to teach it to spot problems.
Ona Juodkiene, co-head of IT at Danske Bank, said the system requires human work before going live. “It takes time and IT professionals to tailor, adjust and integrate these systems into the IT environment,” she said.
Danske Bank said it expects the use of AI will have an immediate positive effect on its customers, who will experience fewer IT crashes.
Juodkiene said the process of teaching the AI system to its workers is also helping them to accept the technology. “Already, we see that some employees who might have been a little sceptical initially have had what we call an ‘AI’ moment, where they really see its value for both the customers and themselves in their daily work,” she said.
But it is not just customers who are frustrated by the high number of digital banking service outages – regulators are also worried.
A report from UK regulator the Financial Conduct Authority (FCA) in November 2018 revealed that about 600 technology outages were reported to the FCA between October 2017 and September 2018. This was a 138% increase on the previous year, with failed IT changeovers being the main cause.
The FCA said that, if needed, it would reduce the bonuses paid to bank leaders if IT failures cause outages for their customers.