The recent news regarding the potential shift in leadership at both OpenAI and Microsoft have prompted questions about the possible impact on how financial institutions should evaluate artificial intelligence vendors. Any leadership change in major partner companies holds the potential for significant repercussions.
History has witnessed this through the pioneering management of leaders such as Bill Gates, Steve Jobs and Steve Wozniak and the negative impacts to their companies upon their departures.
OpenAI and Microsoft are not an exception to the fact that innovative leadership is required to foster employee engagement in technological advancement. The crucial questions linger: Will the leadership sustain investments in research, development and innovation? Can we still rely on collaboration, scalability and financial stability?
Addressing these questions should be a focal point within financial institutions' vendor management programs. Annual evaluations of key strategic partners are not only regulatory obligations but also a prudent business practice banks must follow. The evolving leadership at companies like OpenAI should not divert attention from the fact that many financial institutions have yet to establish policies or strategic road maps for leveraging OpenAI programs such as ChatGPT.
It's plausible that employees are utilizing such software without managerial awareness, prompting the need for a defined utilization process and implementation of a strategic plan for usage. Most financial institutions have not incorporated OpenAI within the security boundaries of their network, prompting increased scrutiny of how employees leverage the technology and ensure data security.
AI has the capacity to produce responses and solutions at a significantly accelerated pace compared to human counterparts. For example, it can rapidly formulate policies within minutes, a task that employees often spend hours on while searching the web for examples.
Customers have an expectation of immediate response and AI can contribute to customer satisfaction. The financial services sector has been exploring and utilizing AI tools for decades, from fraud prevention and lending decisioning software to chatbots. The vendors behind these tools provide institutions with valuable data insights, anomaly detection, natural language processing, biometric authentication and more. Despite familiarity, the challenge lies in educating employees on maximizing the potential of these technologies. While AI offers enhanced efficiency, it comes with the caveat of biases, confidentiality concerns and the necessity for human oversight.
Robust vendor management programs, encompassing evaluations of benefits, risk tolerance, business strategy alignment, scalability and customer experience are vital. Factors such as data privacy, financial conditions of the vendor, business continuity plans and subcontractor use should also be scrutinized. Larger financial institutions with a risk appetite statement and human resource handbooks can utilize these documents to guide employees in the acceptable use of a product like ChatGPT.
Regulatory bodies governing the financial services industry have yet to provide explicit guidance on AI use, emphasizing adherence to the "FEAT" principles — fair, ethical, accountable and traceable solutions. Leadership changes at partnering companies are unlikely to alter this regulatory stance.
Microsoft, a staple in many financial institutions through Office 365, has already unveiled Copilot, demonstrating a commitment to AI integration. This development, predating OpenAI's leadership discussions, suggests Microsoft's dedication to advancing AI solutions.
The launch of Copilot raises questions about whether financial institutions will pivot toward deeper relationships with Microsoft, considering its known trajectory compared to the uncertainties surrounding OpenAI and potential competition from AWS and Google as they integrate AI into their key services such as Salesforce, data analysis and search engines.
A significant concern with the management of Microsoft and OpenAI is the continued development of how Microsoft's Azure OpenAI services will integrate advanced models from OpenAI with the enterprise capabilities of Azure. How will they ensure data privacy and content will stay within the bounds of their organization?
While the futures of OpenAI and Microsoft as well as the delivery of AI services by other vendors remains uncertain, the consensus is that AI will be integral to the future of banking. Opportunities abound for financial institutions embracing AI with meticulous risk and vendor management practices.
The choice of vendor, subject to due diligence and alignment with overall technology road maps, will play a pivotal role in shaping the strategic vision of each financial institution.
