Decisions about credit are still made by humans

Journalist: Ralph Hofbauer | Photographer: Markus Bertschi

Mr Baumann, are your employees allowed to use ChatGPT?
Our employees have recently been given access to a protected internal large language model. This tool meets the highest security requirements and ensures that the data remain within the bank.

How do you use AI in banking? Are machines already making credit-related decisions?
We’ve been using AI for some time, for example in fraud detection and cybersecurity. When it comes to credit decisions, AI-based data analysis is valuable for optimising our models. But the decisions are still made by humans.

In the digital space, the region no longer plays an important role. Do we still need cantonal banks?
Yes, more than ever. Banking will continue to be based on trust – something in which we have a track record going back over 150 years. This is based on our local roots and our commitment to society as part of our statutory service mandate. But that doesn’t mean that we can rest on our laurels. We want to combine the best of both worlds: personal service and digital efficiency.

What added value can a bank branch offer in the future?
I’m convinced that many customers still want to speak to someone in person when they’re taking out a mortgage or looking for retirement advice. That’s why I believe in the bank branch, but it will look different than it used to. We plan to modernise all our 51 branches by 2030. With the new concept, we’re strengthening personal contact and advice. To do this, we’re creating new points of contact for discussions – for example through specialist events, a coffee bar or a boutique that offers various items such as publications from the financial sector.

When will you open the first branch in the metaverse?
We’re focusing on the real lives of our customers – the metaverse isn’t yet being used by the masses. If that changes, we’ll look at the topic more closely.

Robo-advisors are on the rise. Will investment professionals soon be obsolete?
It’s true that you can rely on the support of a robo-advisor for traditional investment classes. But there are still several questions: do you trust the robot’s investment strategy? How does the machine respond to unexpected events? And are the recommendations really as good as those of the experts? Investors have to decide this for themselves. I believe that professionals will continue to play an important role as sparring partners.

ZKB is one of the main start-up sponsors in Switzerland. Which technology has made a breakthrough thanks to your support?
One of the best-known names is certainly Climeworks. The ETH spin-off’s direct air capture process filters CO₂ directly from the ambient air. This technology is attracting attention worldwide and is already in use in Iceland. We also rely on negative emission technologies to neutralise our residual operational emissions. We work with various partners in this area, including Climeworks.

The ZKB Pioneer Award Technopark 2024 went to Decentriq. In which area is this start-up a leader?
Decentriq develops solutions for data clean rooms, which is a promising technology. It allows multiple parties to share and combine their data securely without disclosing the raw data. One use case is marketing. For example, media companies and advertisers can use data together without violating data protection regulations. Data clean rooms are also an interesting prospect for our own industry.

Has it become more difficult for banks to protect customer data?
Increasing networking and digital interaction with our customers certainly makes data protection more challenging, as new points of attack emerge. At the same time, however, we also have new protective tools at our disposal. Besides the technical security measures, the human factor is of utmost importance. That’s why we invest a lot in raising awareness among our staff and customers.

What potential do you see in Blockchain technology?
Cryptocurrencies are the applications that are currently receiving the most attention. The public aren’t really aware that blockchain technology can do a lot more in the financial sector. This is understandable – after all, it doesn’t matter which technology is used to process banking transactions, but instead that the processing is reliable and secure. We assume that blockchain technology will bring administrative efficiency gains and reduce settlement risks, for example in securities trading.

Efficiency gains – that sounds like jobs will be replaced.
We don’t want to replace employees with technology, but rather use technology to empower them. Reducing repetitive tasks frees up time for more demanding tasks. In the IT sector in particular, we’re faced with growing complexity because the demand for digital services is constantly on the rise. Our need for skilled staff is correspondingly high.

One in six employees works in IT. You could procure these skills much more cheaply abroad. Why are you sticking with Zurich?
Because we’re the ‘local’ bank. Our goal is to provide straightforward, secure and steady services for our customers and our employees. Business and IT interact closely in agile teams during development, and decision-making processes are short. We develop and operate all applications and systems in Zurich in Hard, District 5. Our IT support is also based there. We believe this gives us a competitive advantage.

Zürcher Kantonalbank started a philanthropy foundation this year. What role can technology play in philanthropic thinking and behaviour?
Technology strengthens the principles of philanthropy in several ways. It makes education more accessible through online courses and digital libraries, for example. Technology also simplifies the donating process by creating ways to get involved in just a few clicks. It also enables foundations to be managed more efficiently. We’ll use these opportunities to get involved effectively.