Finance Industry Day (2) - Bringing it all together in Business of AI, a SHORT INTENSIVE COURSE (S.I.P.) - at H.B.S.

Welcome to my three-part blog series on the short intensive course at H.B.S. Each part of the blog series focuses on an Industry day.

To access Part I of the series, click on the link – Day 1 – Introduction and Healthcare Industry Day.

Following is Part Two of my Blog.

Day Two – Finance Industry Day - Bringing it all together in Business of AI, a SHORT INTENSIVE COURSE (S.I.P.) - at H.B.S.

Finance - Experts Insight.

Though I am not a finance person, day two was personally a highlight for me. We kicked off the day with Interactive Discussion with two JP Morgan Chase executives Elizabeth Myers, Managing Director Head of Global Equity Capital Markets, and Manuela Veloso, Managing Director, Head of AI Research.

Elizabeth and Manuela led us into their digital transformation journey - JPMorgan Chase is a global leader in financial services, offering solutions to the world's most important corporations, governments, and institutions in more than 100 countries. One of the world's most prominent technology-driven companies. They invest $12 billion in technology annually – of which approximately $3 billion goes towards innovation.

Both Elizabeth and Manuela had a surprising range of backgrounds. They worked together not as spectators of the future but as actors of tomorrow to create an organization that best serves their customers.

The big ah-ha was thinking outside the box to build the digital Innovation team. 

Finance- Case Study

Later in the morning, we got a chance to interact with the star speaker Dan Jermyn, Chief Decision Scientist Of Commonwealth Bank Case Study. Dan is very dynamic and burned the late-night oil for us by joining us live from Australia. 

Dan explained how CommBank uses AI to power its Customer Engagement Engine: a system that analyses data to personalize how the Bank manages its communication with customers and learns from every interaction. That learning helps continually improve the customer experience and provide enhanced products and services. The constant testing and experimentation in the background are just ways to ensure the application of AI adheres to best practices. 

Jermyn shared the importance of responsible application of AI, which the Bank is committed to as it continues to enhance its technical capabilities. "Our well-established processes and governance, including data safety and security, help CommBank apply AI safely and with the right accountabilities," said Jermyn.

 The aha moment for me was looking at the points of consideration for the Ethical AI Framework.

CommBank leverages Ethical AI framework - The framework encompasses eight fundamental principles:

1. Human, societal and environmental wellbeing: AI systems should benefit individuals, society, and the environment
2. Human-centered values: AI systems should respect human rights, diversity, and the autonomy of individuals.
3. Fairness: AI systems should be inclusive and accessible and should not involve or result in unfair discrimination against individuals, communities, or groups
4. Privacy protection and security: AI systems should respect and uphold privacy rights and data protection and ensure the safety of data
5. Reliability and safety: AI systems should reliably operate under their intended purpose
6. Transparency and explainability: There should be transparency and responsible disclosure so people can understand the significant impact of AI and can find out when an AI system is engaging with them
7. Contestability: When an AI system significantly impacts a person, community, group, or environment, there should be a timely process to allow people to challenge the use or outcomes of the AI system
8. Accountability: People responsible for the different phases of the AI system lifecycle should be identifiable and accountable for the outcomes of the AI systems, and human oversight of AI systems should be traceable.

 Authors Insight - Book Discussion

Andrew Chen, Partner & Author Of the book The Cold Start Problem, joined us for an interactive dialog. Observations of Harper's network effects are not new regarding why, what, and how when we look at adopting a product, the stickiness, and the ability to retain market share. A networked product without a network is a useless thing. Andrew's book highlights in a very simplistic way the importance of focusing on building the network effect and the diminished value with the absence of one. It is like a telephone with no one to call, a ride-sharing app with no drivers, a network of rooms to rent with no renters.

 As part of the discussion, the aha moment for me was how as the network effects build, there comes a tipping point, a threshold.

One must consider how overcrowding can lead to degraded experiences beyond which resources become exhausted (servers slow down, the choice becomes too much, etc.)

Andrew Chen's core motivation was not just to describe what happens as a network forms and evolves but to offer practical, actionable advice. One can glean into the following fundamental critical areas of insights.

The essence of the cold start problem is getting the right people and content on the platform simultaneously. It's not enough to have a single network and think the job is complete. One has to take into consideration the following :

A. Acquisition Effect — Think of tapping into the network to drive low-cost, highly efficient user acquisition via viral growth.

B. Engagement Effect — think about how to increase the average engagement of network participants as the network grows.

C. Economic Effect — think about improving monetization levels and conversion rates as the web grows.

4. Understand that Networks hit many ceilings when resolved cause growth spurts until the next ceiling

5. Think of Moat, a very familiar concept to M.B.A. students. Business quality is about defensibility. Defensibility comes from moats. Market moats are about the brand and the share of mind. 

Disintermediation is the process of removing intermediaries.

Finance AI Startup Panel

For the panel, we had Tess Michaels - C.E.O. & Founder, Stride Funding, Javier Betancourt - Senior PM/PO, nCino, Kenneth Salas -Chief Operating Officer, Camino Financial.

My takeaway from the panel was as follows.

We see increasing demand from customers for more personalized experiences. In the financial markets, data gives a competitive edge and timely insight. There is some uniqueness when it comes to the fintech industry.

1. The scale of data and the sensitivity of that data
2. Highly regulated; Need to think about compliance, security, and privacy.
3. Taking into consideration long terms financial plan and its implications
4. It impacts change in financial literacy behavior, focusing on customers' cognitive and emotional aspects rather than just functional.
5. Both B2B and B2C aspects need to be considered part of people, processes, and technology.

Stayed tuned; The following blog post on Technology Industry day as part three of H.B.S. - Business of A. I SIP.