Unlock the Potential of AI in Banking
Setting a Bold, Bankwide Vision for the Value AI Can Create
McKinsey's experience with hundreds of companies shows that capturing value from digital and AI transformations requires a fundamental rewiring of how a company operates. This involves six critical enterprise capabilities: a business-led digital road map, talent with the right skills, a fit-for-purpose operating model, technology that's easy for teams to use, data that's continually enriched and easily accessible across the enterprise, and adoption and scaling of digital solutions. Leading banks view AI not just as a cost-efficiency driver but as a tool to enhance revenues and improve customer and employee experiences.
They embed AI in the strategic planning process, requiring every business unit to set bold financial and customer goals. By prioritizing high-impact areas and investing in enabling scalability, leading banks ensure that major AI initiatives are business-led. This means business executives take ownership and hold joint accountability with technology leaders to deliver outcomes.
Rooting the Transformation in Business Value
Launching isolated AI endeavors like chatbots or document summarizers leads to incremental results and rarely drives material financial changes. To significantly boost business value, banks need to choose the right scope of transformation by rewiring entire domains and subdomains. Instead of having many disparate, siloed projects, leading banks reimagine entire business domains and subdomains using a full range of AI and digital technologies.
When selecting subdomains for transformation, banks consider business impact, technical feasibility, end-user adoption, and solution priority. Once selected, each subdomain is deconstructed into executable modules that drive business value. For example, transforming the customer underwriting subdomain involves multiple AI and digital technologies working together.
Enabling Value through an AI Stack Powered by Multiagent Systems
To embed AI seamlessly across the enterprise, banks implement a comprehensive capability stack. This includes the engagement layer, decision-making layer, data and core tech layer, and operating model layer. The decision-making layer, the brain of the AI-first bank, orchestrates thousands of AI-powered decisions.
Orchestrated multiagent systems represent a major advancement. These systems comprise various AI "agents" that can plan, think, and act. When combined with predictive AI models and digital tools, they can rewire several domains, boosting productivity and creating more engaging experiences for customers and employees.
For example, in credit underwriting, agents can handle most tasks, with human intervention for the final steps. Multiagent systems can automate complex decisions and workflows, enhancing the work of both credit risk teams and employees.
Investing in the Foundations to Enable AI Value Creation
Banks that unlock value from AI make balanced investments across the entire AI capability stack. The industrial AI/machine learning sublayer provides reusable tools for deploying and running LLMs. The enterprise data sublayer stores and accesses large unstructured data sets for training multiagent systems.
Building AI capabilities at scale requires investing in these crucial sublayers to ensure the right capabilities and innovations are in place.
Sustaining and Scaling Value from AI
A successful AI transformation balances near-term financial impact with building lasting capabilities. After choosing domains and subdomains for transformation, banks focus on executing at scale and delivering value from reusable components.
For example, a large bank is transforming to improve performance and deliver analytics at scale. They built reusable assets and an end-to-end analytics pipeline, with early results showing promising revenue increases.
To sustain value, banks set up teams that create value, not just models. They also establish a central AI control tower and governance council to oversee the transformation, track value, and ensure reusability of assets.
Unlock the Secrets to Early Retirement with Minimalism
Financial Independence Journey Begins
Seven years ago, Eman Vergara stumbled upon a book that would change their lives. This discovery led them to realize the potential of early retirement and financial independence. They began to calculate their net worth and saw the possibilities that lay ahead.
The couple, with Eman working in funds management and Kristine as an accountant, started to make changes in their spending habits. They shifted from a maximalist lifestyle to one of minimalism, cutting back on expenses and focusing on saving.
Embracing Minimalism for Financial Freedom
After reading more books and listening to podcasts, Eman and Kristine sold their car and started renting as needed. They swapped expensive supermarkets for Aldi and reduced their travel and dining out expenses. These lifestyle changes allowed them to pay off a significant amount of debt, including AU$24,000 in credit-card debt and AU$26,000 in student loans.
As they moved from Sydney to Toowoomba, a city with a lower cost of living, they were able to increase their savings rate from 50% to 75%. Their combined net worth now stands at about AU$3 million, or about $2 million, with a portfolio breakdown that includes property in Australia and the Philippines, stocks, and a superannuation account.
Family and Financial Independence
Since starting their journey towards financial independence, Eman and Kristine have welcomed two children into the world. Their motivation for this change was to have more autonomy and the ability to travel as a family before their children started school.
Kristine retired from her full-time accounting role about three years ago, while Eman continues to work in funds management with a flexible arrangement. They refer to themselves as "coast FIRE" and plan to take a sabbatical when Eman turns 40 and travel for nine months of the year while homeschooling their children.
Raising Kids with a Work Ethic
As they approach partial or full retirement in the next few years, Eman and Kristine are focused on teaching their children the value of work. They believe in raising kids with a hunger for ambition and want them to understand the power of saving and compound interest.
The couple encourages their children to be involved in volunteering and community work and pick up a trade skill from a young age. They also teach them the importance of saving at least half of their income and staying away from credit cards.
Discovering the Power of Sibling Support in Parenting
Overcoming Initial Doubts
Nina was initially focused only on raising her first child and couldn't imagine having more. The thought of another child with potential neurodivergence was too much to bear. But as she connected with the Down Syndrome community, she began to see the benefits of having siblings. It gave her hope that Mabel would grow up with the love and support she needed.She realized that having a brother or sister would provide Mabel with a sense of belonging and reduce the isolation she might feel. This realization led to the birth of her second daughter, Nancy.
The Unfolding Realization
As Nancy grew, Nina noticed how she took on a motherly role with Mabel. This made her realize the potential burden on Nancy if something were to happen to her and her husband. The guilt of potentially tying Nancy's future to caregiving weighed heavily on Nina's heart.She worried that Nancy might have to sacrifice her own dreams and freedom to care for Mabel. This realization led Nina to make a difficult decision and have a third child, Edith.
The Journey to Having Edith
The path to having Edith was not easy. Nina faced physical and mental challenges, including three miscarriages. But her determination to ensure Mabel's future led her to continue.When Edith was born, a weight lifted from Nina. She saw how Edith's arrival would share the responsibility of caring for Mabel. It also helped heal some of the grief she felt about Mabel's disability.
Setting Up for the Future
Financially, Nina and her husband set up a trust for Mabel to ensure she could pursue her dreams. They wanted all their daughters to fulfill their potential and be happy.Nina's message to her daughters as they grow is simple: look after each other. She believes that with the support of their siblings, they can face any challenges that come their way.