UBP Monaco, as do many private banks, remains very cautious over the use of AI. CEO Sérène El Masri explains why.
What is AI used for at UBP Monaco?
AI has been present in finance for a long time but the sector remains very cautious about its use. Because we are a private bank, clients should be able to speak to their banker at all times. The approach is completely different to that of a retail bank which empowers the client. Of course, our clients can look at their portfolio position, see their credit, apply for or block a card online and so on. We have a lot of tools but it has been our conscious decision to prioritise discussion when it comes to trading, or to buying and selling financial products. Institutional clients, such as external wealth managers, who deal directly on behalf of clients they have introduced to us, can, however, deal online on our electronic platform.
Do you think that in private banking (ie majority of institutions in the Monégasque banking sector) there is any need for a chatbot?
Anything but a chatbot! At UBP, there is always someone online to answer the slightest question. It is really the most absolute antithesis to AI, standardisation, or seeking to economise on scale. On the other hand, we have been using it for a long time in fraud and money laundering risk management, for example. AI generates an alert in the event of an atypical transaction and this alert can call for a much more in-depth analysis to see if, ultimately, the transaction is suspicious. It should be noted that the processing of the alert and analysis are completely manual and handled by people.
Are there any deliberations in progress?
We are currently analysing the use of AI for credit risk management, as American banks or French retail banks already do, to identify the client’s level of credit risk, or estimate their risk default. But we are not there yet... Again, in private banking, every client is different, as is every operation. This limits the extent to which AI can be used as it often relies on pattern recognition models.
Have you set up a committee for AI?
No, we are waiting for guidelines from the Banque de France. However, our Data Protection Officer (DPO) pays close attention to the use of AI, in particular with respect to how it affects data. The risk in our sector is very significant. We are classified as an Operator of Vital Importance (OIV), and the former head of the Securities and Exchange Commission has publicly reiterated the danger of deepfakes and disinformation campaigns, boosted by AI, which could totally destabilise a financial market and create panic amongst depositors.
Have you created your own AI tools?
Absolutely, because there is too much risk of loss of data. I read that of the 11% of employees of companies in the United States using ChatGPT, 5% have already disclosed confidential data specific to their company! This is why, like many banks, we have completely banned the use of any external generative artificial intelligence tool. We have developed a hyper-regulated tool internally that is specific to our needs and complies with European regulations: we are prohibited from entering the name of an employee, a customer, a prospect, etc. to avoid feeding it with confidential data.
According to a McKinsey report, the adoption of generative AI in European banks is expected to grow by 30% per year by 2026, with a projected increase of 45% in use in banking services. Do you think this development mainly concerns retail banks?
It’s a statistic. In private banking, we manage fewer clients but they have complex needs. The use of big data is limited, unlike for retail banks that need to automate as many tasks as possible and empower the customer with AI chatbots, particularly conversational AI... In the same way, using AI to generate personalised recommendations for wealth engineering or investment is not what our customers want, including the younger, more tech-aware and tech-hungry ones. We regularly survey our clients’ 20- and 30-something year-old children – and they want to be able to come in to the bank and speak to their relationship manager.
What is the profile of a UBP Monaco client?
70% are Monaco residents. Generally, they have already sold their companies and then settled in Monaco - or they are still business owners in the shareholder sense but they have delegated the management of the company to their children or a team of professionals. We have a lot of women as clients at this bank, perhaps because UBP Monaco is the only bank in the history of the Monégasque banking sector to have two women in effectively senior executive positions.
