Phil: Hi, I'm Phil Neuhart, Director of Market and Economic Research at First Citizens Bank. Today, we're discussing generative artificial intelligence with my colleague, Milton Santiago, who is our Global Head of Digital Services.
Before we get started, I need to remind you that the information you're about to hear is designed for educational purposes only.
Today's discussion on generative AI is designed specifically for beginners. Discover the fascinating world of artificial intelligence and learn how generative models can create realistic and innovative content. From generating images to composing music, we will demystify the principles behind these cutting-edge technologies and provide practical tips for getting started. Don't miss this opportunity to explore the creative potential of generative AI in an accessible and beginner-friendly environment.
By the way, the previous statement was written with assistance by ChatGPT.
So with that, what do we think about when we think about generative artificial intelligence? Well, one, from an investment perspective, it has dominated the conversation this year. In the US stock market, the seven mega-cap stocks pulling the market higher are each a beneficiary of the boom in AI in one way or another. There's a great hope that AI will drive productivity growth across most sectors in the economy.
This hope is in the context of current relatively slow productivity growth in the US. From 1995 to 2005, average productivity growth more than doubled the pace of growth from 2006 to present day. Why might that be? Well, '95 to '05 was a period defined by the increased adoption and use of personal computers and the internet. These technologies redefined how we work and drove huge efficiency gains during that period.
Now back to the present day, hopes of a more productive future are countered by concerns over the unintended consequences of generative AI and its potential impact on, say, job security—to name just one example on people's minds.
So AI might be the buzzword of the moment, but that does not mean it won't have real and lasting impact on businesses and people going forward.
Today, we hope to set the stage to provide a beginner's guide to generative AI and highlight the value of understanding this technology.
We're proud of our organization made up of both First Citizens Bank and legacy Silicon Valley Bank and hope today's session will highlight the strength and expertise of the combined company.
With that, let me properly welcome Milton Santiago. Milton is an industry-recognized digital banking strategist that is known for creating transformational digital experiences. Milton brings over 30 years of experience and is a seasoned, improving global digital executive leader, innovator and visionary. He's an expert in deciphering client needs and executing those needs into compelling and satisfying digital client experiences.
Given his background as a technologist, Milton has implemented over 130 patented digital experiences that blend consumer behavior with the needs of business practices of all ranges. Milton also served on Microsoft's innovation outreach program, where he represented the bank's consumer and commercial innovation.
In this capacity, Milton collaborated with several innovation leaders across several industries, which include financial institutions, pharmaceuticals, media, automotive, entertainment, tech and military.
So with that—after that long preamble—welcome, Milton.
Milton: Wow.
Phil: Let's just start at the top. What is generative AI?
Milton: So first of all, someone's been looking at my LinkedIn. Thanks for that. So, let's first talk a little bit about what generative AI is not, right?
And I think we'll better be suited by just level setting. All of us have AI, and while it is a buzzword like you had mentioned and there's a lot of talk about it in present, one of the things that we have to recognize is that AI has been part of our lives for a very long time and in different forms.
If you have a smartphone, and let's face it most of us do. And many of us—we may not want to admit it—love taking pictures that have these fuzzy backgrounds. You may do self-portraits. You may do family photos. And it's amazing how when you take that photo, how it's able to blur the background and create almost professional quality-type pictures.
Well, that's AI if you really think about it. Also, most of us have been using programs either on our iPhone or on our Android phones. Many of us know them by name. You can refer to some of them by Alexa, Siri and even Google. That is AI.
But generative AI is very different. Unlike a camera where you can take a picture and the background blur takes into effect, that is purpose-built and only has one function, and it also lacks the ability to, I would say, evolve and improve.
Typically, if you take a photo and the background blurs, it will blur to a certain extent, and the only way that it's going to improve or that it's going to be able to modify itself or other situations is by a physical software update. It doesn't really learn. It really can't improve and learn from every picture that it's taken. It's using a set of, I would say, logic programming that basically informs it what to do based on certain conditions.
Generative AI is very different. Generative AI has the ability to learn. Generative AI has the ability to adapt. It also has the ability to—and let's say it, um, imagine—and even go to the extent of creation. And this is the part where it's scary, but at the same time, it's super incredible. The fact that, through this technology, new things can be created just like humans do.
Think about this. Most of us will learn. You can learn a new skill. You can learn a new language. You can, um I would say, even copy something that you see and turn it into something that is yours. Generative AI has the ability to inform itself through data, through pictures, through sound, through various data sources. And then it's able to extrapolate and create new things that are based on things that it has learned.
That's generative AI—and it's pretty amazing.
Phil: So Milton, obviously, an important technology, a really important development when you think of the recent gains. But on the practical side—what are some practical applications of generative AI?
Milton: There are several applications for this new technology. And what we'll do is we'll start with some of the consumer applications and then dive into the business ones because the business ones will have a profound impact on how we do business and how we engage our clients. From a consumer perspective, generative AI—or just AI in general—is going to help us be better informed. It creates incredible accessibility when it comes to information and being able to do simple things.
We see this in the creative spaces, especially when you think about social media. In the movies, for example, your favorite actor or actress as they are teleported to a different universe or a different situation. Much of the background, much of what's being created, is being leveraged by AI. Even as you may see your favorite actor that may now be, you know, older in their years, but then all of a sudden you see a younger version of them. They're using AI to create that imagery and that face that you see on the screen.
Now, beyond what you see in, I would say, in television and also in Hollywood, you also then have—we as consumers see either on TikTok, Instagram, Facebook—these filters, all these different AIs that are also changing our appearance, and let's say it, it's fun to do with our family and friends. But it goes also into an application in the school systems. Being able to not only just read a book, but also being able to interrogate the book and have a conversation with the book really transforms how we learn and how we gain knowledge.
Now, those are just a few examples of how generative AI are being used both in the consumer space and also in media. But now in the business world, there's a lot of potential for generative AI. First of all, in the customer service space, as you're receiving emails or inquiries from clients. Let's face it that many of those emails and those inquiries that may come in may be very simple in nature. And, you know, there's the 80/20 rule where 80% of the questions can be answered 20%, you know, of the time with simple questions or answers that you may have documented somewhere.
And you're seeking maybe to spend the vast majority of your time on those high-value questions or those high, technically challenged questions, and you could use a human to facilitate the very technical ones or the ones that require high touch, and then have for those vast majority of questions that are coming through that don't require, let's say, a lot of thought or are very repetitive in nature. Like let's say, for example, a password reset. The steps to reset a password are pretty consistent all the time. If you were to receive a customer inquiry and let's reset a password, you can automatically have an AI assist this.
And not only can you have an AI assist in the password reset, but you could also then go as far as provide additional support beyond just the password reset. In addition to this, there's fraud-detection technologies being used and leverage with AI. Marketing is being used with AI.
Various operational parts of businesses. Depending on if you're in manufacturing or if you are in logistics, AI is playing a role in each one of those areas to make it easier for a package to be delivered. Many of the large transportation companies or logistic companies are using AI to find the fastest route—the most efficient route—when they're delivering packages. So there's a lot of options when it comes to AI and how you can use AI.
Phil: So lots of applications. What about potential benefits and impacts? You know, I'm thinking efficiency, productivity, personalization. How do you think about that, Milton?
Milton: Yeah. That's a benefit of the learning nature of AI. It has the ability not just to work on a set of questions and answers. It's not just, you know, you ask it a question and it provides the answer. But it also has the ability to adapt and learn your preferences.
And we've started to see a certain degree of AI in even as, if you think about, in the travel industry when, for example, you're looking to book a flight to a specific location. If you have used the same system, if you're using an AI model that understands your, let's say your travel habits, your food preferences. The AI is able to not just recommend the flight. It's not just able to recommend the hotel. But it's also able to recommend everything around your trip—even to help you understand what are the benefits of staying at a specific location because it may have your favorite coffeeshop nearby. It may have a favorite restaurant close by or a selected type of meal that you enjoy.
So AI has the ability not only to provide questions and answers but also understand you and learn about you. Matter of fact, a lot of the models that we're starting to see with AI and a lot of the solutions that are becoming readily available, um, have the ability to—for a company and also an individual—learn more about you and your habits and create a custom experience that aligns with you. Even to the point where you could even teach AI just by simply giving it samples of your writing—meaning like your emails that you've created—to respond to messages in the tone and context and language that you speak in. Think about that for a second.
Phil: That's incredible.
Milton: It's super crazy that it can do this. And one other thing that you could do with AI is even have it respond in your voice. Now that's—that gets a little bit scary. But if you think about the actual potential there, it's massive in nature.
Phil: So to that point, to your final point, Milton, you know, what thoughts or comments do you have for those who are fearful or concerned at the impact from generative AI? It's continually in the news. There's very smart people that are concerned, but it does seem like the genie may be out of the bottle. You know, what are your thoughts on all of that?
Milton: So if we think about history, in 1440, approximately—given facts coming from AI—the printing press was created. In 1868, the typewriter. In 1879, the electric bulb. Each one of those massive innovations that have taken place in history caused concern. People were concerned about its application. What does it mean? How can it affect people's jobs?
Every single one of those did something massive in history. And I believe that generative AI can have the same profound impact as each one of those massive innovations that's transformed the way we live, how we enjoy our lives in a daily basis and also have improved accessibility.
Think about the impact of the printing press. Think about the impact of the typewriter. Think about how those technologies—at one time, there were people that physically wrote books, and the only way you got a copy of a book was if someone rewrote it over and over and over again.
And how accessible it was, how knowledge was not accessible because, you know, you needed someone to do this writing. And the cost of doing this was, you know, astronomical because of this. I remember as a child, an encyclopedia was a big deal. If you had an encyclopedia in your home, it basically meant that you were wealthy to some degree because they were expensive, right? But they were also fixed in nature. They couldn't improve. They couldn't change. They couldn't adapt. You had to wait for the next volume. And very frankly, it was—if a family had an encyclopedia in the home—it was something that was viewed as a massive investment in the future and knowledge of the family, especially if you had children.
With the advent of digitization, when the internet was born and then things went online, it made encyclopedic knowledge accessible to the masses. It brought the cost down and made everybody better for it. The same thing is going to be happening with AI. As AI becomes more and more prevalent, as we understand it, as we leverage it—it will make society better. It will make us better. It will help us complete our jobs much faster.
Think about those things that you do on a daily basis that you say, "Gee, I wish someone else could do this for me. Do I really need to spend the time doing this?" Those type of tasks, an AI solution can take for you, and then it could have you focus on the things that truly matter. So AI will have a profound change on our lives. But it's really—and I would say the call to action here is—learn as much as you can about AI.
I firmly believe that many people are concerned about the job loss that could come from an AI solution. It's really about thinking about how can AI create new solutions, new markets, and how can it expand your business? That's where your focus should be.
Phil: So for those who want to learn, as you mentioned, you know, where's a good starting point? How can you get started with generative AI?
Milton: Yeah. Great question. And this is something that many ask themselves every day. It's like "Where can I learn about this?" And we have to go to where AI lives, and that's on the internet.
Simple. Google has a program that is free for everyone to subscribe to, and it doesn't matter if you are a iPhone user or an Android user. You can subscribe to Google Labs, and with Google Labs you'll get access to a new search engine.
Think of it. Most of us use Google to search for answers when you're looking for maybe something to buy, you're looking for an answer, and it's very question-and-answer based. If you subscribe to Google Labs and you actually subscribe to their generative AI search engine—all of a sudden, when you do a search, not only are you getting the answer, but you're getting much more detail. You're getting a very verbose response that covers many aspects of something that you're looking for.
We are basically dog lovers in our home, and we have Pomeranians. And one of the examples I had done was I typed in the word Pomeranian and hit enter, and with the generative AI solution, it not only brought up what a Pomeranian was, but it described the breed. It described the eating habits. It described the health habits. It described care for a Pomeranian. It gave me pictures. Think about how informative and how—I would say compelling—the information was as opposed to just giving me a simple answer and question.
And again, this experience, the way you start experiencing AI is all online. And subscribing to Google Labs is one of the—I would say the most cost effective because there's no cost—and it's also the one that's going to give you a lot of visibility, but it's not just Google. Microsoft also has AI solutions.
Imagine being able—think about this as a business professional, even as a student, how many of us create PowerPoint presentations? Think about these. Right?
Phil: All of us.
Milton: Right? All of us, right? Think about the hours that we spend creating a presentation. How many of us kind of get brain freeze when you're creating a presentation?
Phil: All of us.
Milton: Right? Now imagine being able to go into a deck or a program and being able to type in: "I'd like to create a presentation on this topic." And then having AI basically do the research for you, do the PowerPoint slides for you. And then being able to give you the results. And keep in mind that this isn't the final copy. It is basically the beginning. This is a primer. This is the inspiration that you can leverage to be able to create your final product. Those are some of the ways that you can use—that you can get access to AI and start experiencing it.
Phil: So this is speculative in nature of this question, but if you think about, you know, it was really a short period of time in which the internet went from something kind of fun to use to a tool, right? What do you think—what's the timeframe here with generative AI? We've obviously had some breakthroughs over the last 12 months in terms of technology. Is this a 5-year thing? Think about 1995 to 2000, how much the world changed from a technology perspective. Is it shorter? And what's your best guess there, Milton?
Milton: Yeah. I think that AI is here, and it's not just here. It is evolving at the speed of, I would say—beyond even in some cases, this is the scary part—of human intellect.
The speed in which this is evolving, and the speed in which it's learning and how it's adapting and it's providing value is going to be limited to the innovation economy and the application of that technology itself. I expect over the next 5 years for AI to be as commonplace as the light switch that you flip in your home.
Phil: Interesting.
Milton: It will be something that you won't even have to think about. It's just going to be there. If we've all seen these sci-fi movies, one of my favorites, I would say, comic book characters is Iron Man. Right? And we know—and his AI is well-known, and we may not have thought of it as AI—but Jarvis.
Phil: Right.
Milton: Think about how Jarvis is not viewed as—is more viewed, I would say—as a partner, as a facilitator, and how Tony Stark when he was creating his Iron Man suit would basically have a conversation. "Do this. Do that. Change this. Change that." And how it created rapid modeling and rapid innovation with the assistance of AI. Even to the point, like, one of the, I would say, moments in the theater when I was watching the show—and you could hear everybody say "Yes!"—was when he requested some red to be thrown on the suit, and how the AI painted the suit. You remember that one? And then you saw your comic book character came to life.
Phil: Yeah, the idea is that AI becomes—it integrates into your life. It's not necessarily somewhere you go to use AI. Just sort of like think of the early internet explorers, right? Now it's just part of our life. We don't think about it the way we thought about it 30 years ago. That's really fascinating.
Milton: And imagine in business one morning you waking up and going to your, I would say to your screen, but you're brushing your teeth and just say, "Hey, how's my day?" And then being able to have an AI just list out, "These are your meetings. This is what's going on." Telling you that there are conflicts, telling you—how many of us have missed an email? How many of us have scrambled to just get to a specific deadline? And imagine an AI recognizing that not only is this a work situation, but then also saying, "But don't forget you have to pick up the kids today." Right?
And helping you throughout your day, giving you assistance. Right? And if you think about that how—to me, that would be incredibly impactful, not threatening, right? Sometimes we have a significant other that does that for us when you're about to leave to the office in the morning. They go, "Don't forget. You've got to pick up the kids."
Those type of things AI could do for you, and it's going to change the way we live.
Phil: Milton, thank you so much for your time today. This really was fascinating and helpful. And to our audience, we hope this beginner's guide to generative AI helps you dig deeper in your understanding of this technology. Additionally, we hope today's session highlights the strength of our combined organization, and the expertise we bring to the table.
