Hartford Business Journal

HARTFORDBUSINESS.COM | SEPTEMBER 18, 2023 23 Will Callender think AI is safe and applicable to what we are trying to do," Rotatori said. "Allowing a machine or artificial intel- ligence to think for itself and make its own decisions that customers didn't want, we aren't going to take that chance." Ion does run a financial advisory firm that uses AI for research, Rota- tori said. But any conclusions are vetted by professionals. Rotatori said he hears similar senti- ments from colleagues at other banks. "Right now, everybody is very cautious," he said. Last year, Danbury-based Union Savings Bank, with $3 billion in assets, announced it was dipping its toe in the AI waters by launching an artificial intelligence-supported mobile app tool that allows customers to track spending and better manage their finances. USB Spending Insights, which Union Savings launched in partner- ship with Florida-based financial technology provider FIS, offers more than 50 different data points about an individual's finances and allows customers to track spending trends and set budgets. It also analyzes accounts, predicts how much money users will have and suggests actions that can be taken to gain control of finances, the bank said. Great deal of curiosity Will Callender, president of banking technology provider FinMain, said every financial institu- tion is likely using AI applications to some degree, whether they recognize it or not. "I'd say all banks are using AI at some point today because all banks have vendors, and vendors use AI," Callender said. "Lots of banks use analytic packages for pricing models, the price of a loan, price of a mortgage, price of a deposit. Generally speaking, those are outsourced solutions that rely on a lot of centralized intelligence from an analytic package that is processing data. That's predictive AI, right?" FinMain provides banking tech- nology to dozens of midsize regional and community banks — ranging in size from $750 million to $150 billion in assets. Callender acknowledged that the banking industry, on the whole, has not embraced the most modern forms of AI into everyday, in-house processes. Even so, there is a great deal of curiosity from banks on how to leverage generative AI, which uses data to create original content. Callender said it's one of the hottest topics at FinMain's twice-yearly Bank- Tank innovation forums. There are a number of potential AI uses for banks, he said. It holds the potential to cut down on fraud by recognizing suspicious activities and even flagging suspect checks. It can tailor marketing to individual customers and ease their banking experience. It can also generate reports and eliminate much of the grunt-work involved with data entry. That could mean a reduced need for staff, Callender said. But it will also mean remaining staff will have more time to innovate, focus on customer service and build relationships. "There is going to be a massive opportunity and responsibility to change the workforce from doing repetitive, simple manual tasks to more value-added tasks, which is no easy feat," Callender said. According to a June 2023 report published by consulting giant McKinsey, generative AI could have a significant impact on the banking industry, generating value from increased productivity of 2.8% to 4.7% of the industry's annual reve- nues, or an additional $200 billion to $340 billion. "On top of that impact, the use of generative AI tools could also enhance customer satisfaction, improve decision-making and employee experience, and decrease risks through better monitoring of fraud and risk," the report said. Early adopters in the banking industry have used generative AI primarily for software and knowledge applications, the report said. Other uses could include leveraging gener- ative AI bots trained on proprietary knowledge — such as policies, research and customer interaction — to provide employees with round-the- clock, deep technical support. "For example, Morgan Stanley is building an AI assistant …, with the aim of helping tens of thousands of wealth managers quickly find and synthesize answers from a massive internal knowledge base," the report said. "The model combines search and content creation so wealth managers can find and tailor informa- tion for any client at any moment." Keeping up James C. Smith, former CEO of Webster Bank and owner of banking consultancy JCSmith Advisors, said it's sensible for heavily regulated bankers to tread cautiously with AI. He expects banks deploying AI processes to duplicate those efforts with humans, at least short term, to double- check the technology's accuracy and effectiveness. This is the "belt-and-suspenders" approach banks used a decade ago when first adopting automated loan applications, Smith said. Smith anticipates AI's integration into banking will be subtle, but compounding and necessary for those who want to keep up. "In the near-term, things don't seem to be changing all that much, but over a five-year period they will change more than you can recognize," Smith said. "I would say those bankers who don't embrace AI as a tool that can benefit their customers, improve their marketing and communications, lower their operating costs, prevent fraud and elevate their employees, they'll be challenged to keep up competitively." James C. Smith CT startup uses AI to help electric companies ID faulty utility poles, equipment By Linda Keslar Hartford Business Journal Contributor T he aging U.S. electric grid, which was mostly built in the 1960s and 1970s, is facing significant demand from the rise in elec- tric vehicle use and other innovations. It's also becoming increasingly vulnerable to service interruptions and outages due to climate change and extreme weather events. Bare electrical wires and leaning utility poles, for example, have been cited as the possible cause of the recent deadly Maui fires. There's an estimated 185 million utility poles crisscrossing North America, with the average pole made of wood and nearing the end of its 40-year shelf life, according to industry statistics. But less than 20% of utility poles are replaced annually because inspection is an expensive and labor-intensive process. It requires utilities to send out dedicated teams — armed with cameras, binoculars and notepads — to make in-person assessments. Stamford-based tech startup Note- worthy AI has found a way to streamline that process. Its technology, Noteworthy Inspect, helps electric companies eval- uate pole conditions through cameras that can be mounted on utility vehicles performing routine operations. The company's technology combines cloud-based artificial intel- ligence software and computer vision that automatically geolocates a pole, and then produces high-resolution digital images and data points. That data gets processed through machine-learning models to detect pole defects, such as corrosion, rotting wood, leaky transformers or broken insulators. The technology allows customers to proactively identify problems that require maintenance, reduces preventable service disruptions and provides crucial cost savings, said Christopher Ricciuti, founder and CEO of Noteworthy AI. "Our platform moni- tors, processes and notifies utilities of equipment defects in real-time," Ricciuti said. "It's cheaper to use AI to find the needle in the haystack." Raising awareness Ricciuti, who created the tech- nology with an initial team of engi- neers, founded the company in 2020, aided by an affiliation with UConn's Technology Incubation Program and WHAT'S COMPUTER VISION? Stamford-based Noteworthy AI's artificial intelligence-enabled utility pole inspection technology uses computer vision. According to IBM, computer vision is a field of AI that "enables computers and systems to derive meaningful information from digital images, videos and other visual inputs — and take actions or make recommendations based on that information." "If AI enables computers to think, computer vision enables them to see, observe and understand," according to IBM. Christopher Ricciuti AI IN CT

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