Big banks and how they're thinking about AI

Wall Street giants reported their quarterly earnings in bunches this week and AI was a hot topic. Big banks are worth watching when it comes to AI because they have a few unique characteristics including:

• Big banks can build their own AI.
• The companies see AI as a way to drive the top and bottom lines.
• There's a heritage of building their own systems.
• Big banks don't let vendors dictate their architecture. See: Don't let your vendor's AI strategy become yours
• And these financial giants have the data, engineering knowhow and talent.

Here's a sampler of what big bank executives are saying about AI's impact.

Citigroup CFO Gonzalo Luchetti said the company is looking at structural costs and eliminating them via AI and automation. "We have more than 100-plus processes that we're mapping end-to-end where we see opportunities for further automation," said Luchetti.

He said Citigroup's C-suite meets as a team weekly to check progress on those process improvements and progress in automation.

Jamie Dimon, CEO of JPMorgan Chase, said AI is a bit different from previous trends. "You don't uniquely benefit from AI. The ultimate beneficiary of AI will be our customers. And in a competitive capitalist world, we all use AI to do a better job for customers. And we can't just say, "Oh, it's going to increase our margins, and we're going to keep that." If that were true, our margins would be 80% today because of computerization over the last 20 years," said Dimon.

He added: "We are going to use AI to do a better job for our clients. That's our job. We fully expect it will have huge efficiency in certain parts of the company. There's almost 1,000 use cases today, but I would say the really important ones are 50."

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JPMorgan Chase CFO Jeremy Barnum said the bank's token expenses have been trivial even though the AI spending--about $700 million this year--isn't. "We've done a lot of really high-quality thinking on this and a lot of the infrastructure that we've built over the last couple of years is going to position us to be quite sophisticated about using the right models for the right purpose," said Barnum, who noted that JPMorgan Chase will closely watch the value being created.

Goldman Sachs CEO David Solomon said that AI won't change the reality that Goldman Sachs is a relationship business. "Just as we are helping clients navigate this period of change, we are also implementing learnings within our own firm. There has been much debate around the broader implications of AI on the workforce. While it will change how work gets done, it will not replace what matters most in driving our business, our extraordinary people," said Solomon. "We see AI as a transformational technology that expands the capabilities of our best-in-class talent and our capacity to drive commercial impact for our clients."

• Goldman Sachs Q2: The AI takeaways for the top, and bottom lines
• Bank of America's AI usage: 400,000 prompts a day, more than 300 use cases approved