By Michael Cullum, Vice President of Engineering at Bud Financial
Generative AI (genAI) is a powerful tool that is transforming the financial industry and empowering financial services professionals. It is making banks more data-driven and insightful, improving decision-making; providing deeper insights; and achieving greater agility, personalized customer service, and automation. The quality of transaction data is at the core of this transformation, providing invaluable insights into customer behavior and giving professionals a sense of control.
Banks are increasingly adopting genAI to improve operations, from spend categorization and transaction monitoring to improving risk decisions and predictive customer service. The key to these benefits is enriching transaction data. This process involves enriching raw transaction data with contextual information such as merchant ID, transaction location, payment processor details, and spend categories. Enriched data allows banks to build a comprehensive picture of customer behavior, enabling personalized services and accurate risk assessments.
The cornerstone of genAI’s effectiveness lies in the quality of a bank’s data, and customer transactions are its most valuable asset. Transaction data provides deep insights into customer behavior and market dynamics that, when analyzed at scale, can provide significant benefits across a bank’s value chain. The potential applications are vast, from improving risk decisions to creating innovative recommendations to delivering predictive customer service.
In the banking context, the main focus of genAI conversations is on large language models (LLMs), which are great at dealing with textual information but are most effective when working with natural language. This presents a challenge for banks because genAI needs to process a lot of data to be useful. For transactions, this means adding dimensions that can be described in natural language and in as much detail as possible to ensure that all possible patterns and matches are found.
“The effective use of GenAI depends on the breadth, depth and quality of a bank’s data, and the most valuable data a bank has is customer transactions,” said Richard Berkley of PA Consulting.
Bud Financial (Bud) helps banks and financial institutions provide this context to their customers and alerts them to ways they can improve their decisions. At the same time, banks can use this data to improve their own decisions in areas such as credit affordability and application processes. Bud specializes in enriching customer transaction data, providing context that makes it useful across the organization, including as input for genAI applications, enabling banks and financial institutions to gain a deeper understanding of customer behavior, improve risk assessments, and deliver personalized services.
The Bud platform processes large amounts of real-time data, providing actionable insights that improve customer engagement and operational efficiency. Bud uses advanced technologies such as DataStax Astra DB to seamlessly manage and scale data operations, ensuring high performance and reliability. The scalability and performance of Astra DB enables Bud to process hundreds of thousands of transactions per second, enabling it to deliver real-time insights and services.
GenAI is not only transforming financial services; it is also inspiring banks to leverage the full potential of their transaction data. Investing in data enrichment and advanced AI models will enable banks to gain deeper insights, improve customer service, and drive innovation. As the financial services industry continues to evolve, finance professionals must stay current and informed about the role genAI will play in shaping the future of banking, keeping them inspired and proactive.
Read the new report to learn more about genAI in financial services. How to Use GenAI to Multiply Customer Insights from Transaction Data, From Bud and PA Consulting, with contributions from DataStax, Google Cloud, and Zup Innovation. The report explores the revolutionary potential of genAI in financial services, highlights the emergence of the ‘smart bank’ and the shift towards an ‘AI-first’ mindset, and details how genAI will drive transformative changes in strategic and operational decision-making in banks.
About Michael Cullum
VeriStax
Michael Cullum is VP of Engineering and Data at Bud, a London-based fintech company that produces a platform used by leading global banks and fintechs to leverage the potential value and power of transactional data to gain a 360-degree understanding of customers and deliver actionable insights.