How Valley Bank Uses AI to Drive Banking Innovation

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TL;DR:

• Valley Bank is integrating AI into both internal operations and customer interactions, with agentic AI poised to automate low-value tasks.
• Traditional banks are evolving from offering just products to curating comprehensive platforms of services, data, and AI-driven insights.
• Strategic innovation in banking requires a balance between speed, risk management, and governance to stay compliant while adopting emerging tech.
• Partnerships with fintechs are essential for banks to co-create solutions and expand beyond their traditional services, fostering ecosystem growth.
• Successful AI adoption in banking starts with addressing business problems, not just technology, ensuring solutions are relevant and impactful.

Before we dive into the key takeaways from this episode, be sure to catch the full episode here:

Meet Izge - Director of Strategic Innovation at Valley Bank

Izge Cengiz Ercan is the Director of Strategic Innovation at Valley Bank, where she leads the charge in bridging traditional banking with the future of fintech.

With a background in product innovation, she has helped transition Valley Bank from digital product development to exploring cutting-edge AI and agentic systems. Izge is passionate about transforming how banks interact with their customers and about developing seamless experiences that blend technology with trust.

Her career journey has given her a unique perspective on how banks must adapt to remain relevant.

From overseeing product strategy to driving partnerships with fintechs, Izge is at the forefront of an innovation-driven culture at Valley Bank. She believes that embracing AI and maintaining regulatory compliance are essential to creating value for both customers and the bank itself.

Transforming Traditional Banking with AI

Izge explains that the role of digital products in banking has shifted drastically in the last decade. “The expectation from our customer base has changed so much that digital channel is just an extension of your bank,” she says.

What was once considered an alternative channel is now expected to deliver a seamless experience across digital and physical touchpoints. “It’s that omnichannel experience that we need and try to achieve today,” she adds.

At Valley Bank, this evolution is powered by AI that helps create personalized, frictionless banking experiences for customers, whether through mobile apps, voice AI, or digital agents.

Building the Future of Banking: Platforms Over Products

Izge sees a future where banks move from simply offering products like loans and accounts to curating comprehensive ecosystems.

“Banks won’t just offer accounts and loans, but we’ll start curating ecosystems of services, data, and AI-driven insights around our customers,” — Izge Cengiz Ercan

Valley Bank’s goal is to become a trusted advisor, not just today but for the next five years. The key to this strategy is integrating emerging technologies to anticipate and solve customer needs.

"What's our strategy to be that trusted advisor, not just today, but also in five years?" Izge asks, emphasizing the importance of long-term vision.

AI as a Tool for Augmentation, Not Just Automation

Izge believes in the power of AI as a tool for augmenting human work rather than just automating processes.

“We see AI as an augmentation tool first to help our employees be more productive and make better decisions.” — Izge Cengiz Ercan

While automation is a goal, it is not the first priority. Valley Bank’s focus is on leveraging AI to enhance employee capabilities and decision-making. "The first phase is really about leveraging LLM-backed chatbots and voice AI to handle customer interactions," says Izge.

This foundation will eventually lead to more automation, as trust and governance around AI increase.

Balancing Innovation with Regulatory Compliance

A core challenge in banking is balancing speed with regulatory compliance. “We know that as banks, we can't just move fast and break things,” Izge notes, referencing the cautious approach banks must take.

To navigate this challenge, Valley Bank uses a responsible innovation framework with clear guardrails, testing sandboxes, and early involvement from risk and compliance teams.

"We try to bring our risk and compliance teams in early," Izge says, "which might seem counterintuitive, but it actually accelerates innovation." This strategy ensures that innovations are not only compliant but also safe to scale.

“You need to try and test in order to get good at it, and because AI is moving so fast, doing those cycles very quickly matters.” — Ankur Patel

Co-Creation with Fintechs: The Path to Strategic Innovation

Partnerships with fintechs are a key part of Valley Bank’s strategy to stay ahead in innovation. “We always look for strategic fit,” Izge says, explaining the importance of ensuring that new technologies solve real problems.

This involves not only financial investment but also collaboration to help fintechs mature their products. "We’re not in the business of just capital deployment," she explains. “We’re there to help capability build as well.”

By working closely with fintech partners, Valley Bank creates win-win scenarios where both sides can experiment, learn, and innovate together.

Would you like to learn more about AI in banking? Check out this episode on how banks de-risk startup partnership ft. Malcolm Jussawalla.