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Artificial intelligence has become a key part of banking practices ever since it first appeared on the scene. How is Banque de Luxembourg integrating AI into its processes? What role does AI play in the client experience? Find out what Stéphane Bouvy, Chief Financial Officer at Banque de Luxembourg, has to say about the challenges involved in adopting these solutions.

How does Banque de Luxembourg use AI?

In 2018, we created a department focused on data use. This enabled us to work across the entire value chain of data exploitation, from descriptive to cognitive. AI thus represents an additional way of exploiting data.

We don't use AI for the sake of it; we believe in using AI in a deliberate manner, where it makes the most sense in our private banking activities, and always within an ethical framework that protects the integrity of our data. AI is not intended to replace human intelligence: on the contrary, it complements and strengthens it.

Currently, our team of data scientists is working on several use cases, enabling us to continuously offer new functionalities and develop our approach over time.

We also support two PhD students, one at the University of Luxembourg and the other at Maastricht University. At Banque de Luxembourg, our vision is to prioritise the continuous improvement of our processes and to contribute to this dynamic, evolving ecosystem in Luxembourg, in particular the financial system.

Do you have any use cases you could share with us?

These are mainly to support our business processes and anti-money laundering compliance. In general, these use cases are part of an approach designed to facilitate the work of our employees.

While remaining the client's preferred contact person and building on the relationship of trust built up over time, private bankers can lean on AI for support, depending on the situation and the client's needs. In particular, using AI in a deliberate and supervised manner relieves them of repetitive and time-consuming tasks so that they can focus on the intrinsic value of their mission.

“We also have a fraud detection model for transfers that has repeatedly demonstrated the relevance of these technologies. This enables us to protect our clients and facilitate the work of our employees. As such, both groups benefit from this approach.” 

How does European law regulate AI?

“The aim of this regulation is to guarantee better conditions for the development and use of this technology and to provide greater transparency and protection. This solid framework aims to strike a balance between promoting innovation and ensuring the responsible development of AI. To achieve this, the law uses a risk-based approach, categorising AI systems based on their level of risk.

This desire on the part of the regulator to provide a framework for best practice and avoid misconduct is a good thing. It should be remembered that this applies to all areas of activity, not just the financial sector.

The potential of this technology is still impressive, and we believe it is important to guide the various players in the direction of consumer protection.

With this in mind, we have undertaken a review of our existing models in order to categorise them according to the law and prepare for their implementation. Our reasoned and targeted approach to the adoption of these technologies puts us in a good position to welcome this new regulatory landscape, even if further efforts will be required.”

What does the future hold for AI?

“It's not easy to project and estimate the potential and impact of AI in the financial industry. But AI is an opportunity and a tremendous help in business development.

While some data “prophets” are already predicting that AI could replace board members by 2030, we believe that human intelligence will continue to play an indispensable role in the decision-making process and in general. AI can certainly help us at different levels and in defined use cases, but humans will and must remain the ultimate decision-makers. It’s important that there is no artificial intelligence without human intelligence. And this is all the more true in the field of private banking, where the relationship with the client is precious and where trust is a pivotal aspect of the relationship.

But it’s clear that these technologies will profoundly change the way we work in the sector. We have an additional tool at our disposal, and it’s up to us to use it responsibly and ethically.”

Article also published on Delano.lu on 18/08/2023

Stéphane Bouvy
Chief Financial Officer