The bank branch isn’t dead, but it is being reborn. I’m looking at how banks are using AI to transform the in-person experience, from smart ATMs that can do almost anything to holographic bank tellers that can provide expert advice. The branch of the future is here.
The Counterintuitive Truth
In AI in banking, the best practitioners often do less, not more.
The lesson: the market doesn't care about your roadmap. It sounds simple. It's incredibly hard to execute.
Why Most Approaches Fail
Many common approaches to AI in banking are flawed at the root.
The root cause is usually one of three things:
Copying what big companies do without understanding why they do it. What works for Google doesn't work for a 10-person startup.
Over-engineering the solution when a simple approach would work better. I've seen teams spend six months building something that could have been done in two weeks.
Ignoring the human element. Technology is the easy part. Getting people to actually use it is where the real challenge lives.
The Framework That Actually Works
Here is a simple framework for evaluating AI in banking. It's not complicated, but it requires discipline.
Step 1: the data tells a different story than your gut
This is where most people go wrong. They skip this step entirely and jump straight to execution. Don't do that.
Step 2: simplicity beats complexity every time
Once you have the foundation right, this becomes much easier. I've watched founders struggle with this for months when the answer was staring them in the face.
Step 3: Iterate relentlessly
Nothing works perfectly the first time. The companies that get AI in banking right treat it as an ongoing process, not a one-time project.
What I Tell Founders
Before deciding anything about AI in banking, start with three questions:
What's your timeline? Because the right approach for a company with 6 months of runway is very different from one with 3 years.
What have you already tried? Most founders have tried something. Understanding what didn't work is often more valuable than knowing what might.
Who on your team owns this? If the answer is "everyone" or "no one," that's your first problem to solve.
These questions seem simple but they reveal a lot about where a company actually stands.
This connects to broader themes around AI fraud detection, algorithmic trading, AI risk management that I've been thinking about a lot lately.
Final Thoughts
There are no shortcuts in AI in banking, but there are smarter paths.
The strongest teams treat AI in banking as a competitive advantage, not a checkbox. They invest in it early, measure it obsessively, and never stop improving.
If you're just getting started with AI in banking, don't be intimidated. Everyone starts somewhere. The key is to start with the right mindset and the right framework, and then execute like your company depends on it. Because it probably does.
Frequently Asked Questions
Q:Do all experts agree with this view?
No, and that's fine. The best ideas in business are often contrarian. I share my perspective based on my experience and data, but I encourage you to seek out opposing viewpoints and form your own conclusions.
Q:What's the most common pushback you get on this?
People often push back by citing exceptions or edge cases. And they're usually right that exceptions exist. But building a strategy around exceptions rather than patterns is a losing game for most founders.
Q:What experience informs this perspective?
This perspective comes from over a decade of building companies in Silicon Valley, two successful exits (RemoteTeam to Gusto, MovieLaLa to Gfycat), and investing in 234 startups including Anthropic, OpenAI, and Scale AI. I write about what I've lived.
Q:How has this view evolved over time?
My thinking on most topics has changed significantly over the years. Early in my career, I held many conventional views that experience proved wrong. I try to update my beliefs when the evidence changes.