One Zero - where banking meets AI

Gal Bar Dea and Ori Goshen credit: Cadya Levy
Gal Bar Dea and Ori Goshen credit: Cadya Levy

Digital bank One Zero CEO Gal Bar Dea and AI developer AI21 Labs CEO Ori Goshen, both companies cofounded by Amnon Shashua, explain what they can achieve together.

It's evening on Tel Aviv’s Beit Oved Street. Alongside the entrance to digital bank One Zero, is a large Bank Hapoalim sign. To all outward appearances, just another bank. But the collaboration between One Zero CEO Gal Bar Dea and Ori Goshen, CEO of AI21 Labs, a developer of artificial intelligence (AI) language processing applications, makes it clear: this bank is a high-tech company for all intents and purposes, and is now putting AI at the forefront of its operations.

"I estimate that, thanks to AI, experts will no longer be limited in the number of people they can serve," says Bar Dea. "Let's say an excellent doctor will be able to serve many more patients through AI. Companies and organizations will be dramatically smaller. In Israel we will see startups worth billions, with four to ten employees. For the first time, technology won’t increase a company’s size. Smaller companies will have more power."

Goshen agrees, "There have been many far-reaching prophecies, but we do see the trends that will happen over the next two years. For example, the implementation of technologies and models in various industries. At first, in human use and not completely autonomous. The next step will be systems that can do complex reasoning. Not just question answering or answer summarization, but real-world applications and drawing conclusions. They will deal with more complex tasks."

This interview follows a significant announcement by the two companies: One Zero is launching a new private digital banking service called Ella - a natural language platform to answer customers inquiries. At this stage, the technological development, (from AI21 Labs, of course), provides answers to frequently asked questions - which comprise about 60% of inquiries, at present - and in the next stage will be able to answer personalized queries. The system is expected to answer about 80% of bank inquiries.

Customers chatting with Ella can, for example, request account activity, and receive personal information. According to Goshen, the most important thing these models have learned is to say "I don't know." "This is our way of dealing with the hallucinations and guesswork of other AI models," Goshen says.

Bar Dea explains that Ella solves a problem that concerned One Zero from the start. "We want to grow our number of customers, but we didn’t want to increase the number of bankers, whether in customer service or the back office. That's why, four years ago, we aimed to solve this problem, to continue to grow the business in Israel and abroad, but keep the same number of employees. And this is the way."

"This move changes the bank's cost structure, and enables it to grow more easily. From the customer point of view, they have zero response time. Instead of waiting minutes or hours, depending on the bank, customers don’t have to wait at all. This isn’t winning by a point or two, this is a knockout," Bar Dea claims. The technology, which did not exist before was made possible by recent advancement.

Goshen describes the fundamental change in perception: "We all know ChatGPT, but the question is, how to bring it to the enterprise, in particular an enterprise like a bank, which is committed to a very, very high level of reliability. And also, the costs must be low enough to allow it to scale significantly." This is where AI21 Labs came in. "We belong to the small cohort of companies that develop large language models. There’s OpenAI and Anthropic in the US, there’s Mistral of France, Germany’s Aleph Alpha, and we Israelis."

Goshen makes note of what makes his company an AI pioneer: "General-purpose large language models are insufficient; we produce smaller models that specialize in specific issues. These are called Small and Specialized Language Models or SLMs. These models specialize in specific tasks. In the bank’s case, the task is receiving questions, and providing accurate answers based on given information."

Training the bot on what not to answer

The question is whether users will feel at ease. According to Bar Dea, "If it looks like something they know, if it's comfortable, and feels like a real person, then we’ve lowered another barrier. We're working on building trust."

Bar Dea shares that he asked Amnon Shashua, (the link between the two companies, as both AI21 Labs chairman and a One Zero cofounder), if people would trust a machine. "I asked him about the moment when people click on the autonomous driving button for the first time. He explained there’s a lot of psychology involved. At first people won’t let go of the wheel, then they gradually loosen their grip, and only then do they start leaning back. Same thing here. At first they’ll be suspicious, but they’ll get it." He adds: "We saw that customers were starting to ask questions that were hard for them, that they wouldn’t feel comfortable asking a banker. The advantage is that you can query the system without a human behind the scenes."

A tool like this presents two clear challenges: first, a technological one: producing a tool able to provide accurate and correct answers, and training it to know what is forbidden to answer. Goshen explains, "If it is asked a question outside its field, it will not answer. It answers based on existing content. It is important that the model knows how to ensure that the answer makes sense, and does not deviate from the desired policy."

This gives rise to positions that did not exist before. "We have a whole team that receives reports and monitors logs: success/failure, good/bad translation," says Bar Dea. "We have a team called Feedback Loop, which is a profession that didn’t exist a year ago. It’s a kind of X-ray, that reviews the AI logs, understands where the problem was, analyzes, and then fixes as needed."

Regulation is the second challenge. "There is still no regulation of artificial intelligence anywhere in the world. It’s starting now," Bar Dea explains. "The first regulatory definitions for artificial intelligence came out not long ago, that basically said, ‘Do no harm’. These days, we’re working with the regulators to ask the right questions and do the right oversight. We’re blazing a trail, together with the Bank of Israel, today." The bank also self-regulates, as a damaged reputation would keep customers away. "I'm sure that a formal regulation will follow," he concludes.

"Prophecy has been given to fools, but the direction is clear"

One Zero is satisfied with its results for the past year: 100,000 customers and NIS 2 billion in deposits during a year of social protests, and war in the fourth quarter. The banks concept is money management in return for a subscription fee. They review customer accounts, note actions the client could take, and make suggestions that will increase trust and make clients want to have additional actions taken on their behalf, even actions not done by other banks, such as overdraft warnings. "We pay so that clients will know we are objective. That is how we build trust and transparency," says Bar Dea.

On the other hand, Ella could work against the consumer. After all, a client can bargain with a banker, but less so with an AI. "In theory, that’s true. But, because we maintain a very lean organizational and operational structure, we actually give the best deposits and cheapest loans. The NIS 49 we charge per month is half of what an average household pays in bank fees." Goshen adds: "Intuitively, we can all agree where this future is headed. How long will it take - five or ten years? ‘Prophecy has been given to fools,’ but the direction is clear."

According to a Harvard Business Review study, 72% of working hours could potentially be transformed by generative AI, a particularly high figure compared with other service areas. According to Bar Dea, this is also the reason for the company’s latest layoffs: 30-40 employees or 10% of all staff. "We founded the bank, we implemented super advanced automation systems - including the Ella service, which allowed us to let go bankers and service providers. The current situation allows us, to put it mildly, to reap rewards. We’re more efficient, need fewer people, and can support the growing number of customers with fewer employees. So it's a healthy move, and good for the shareholders. Of course, during a difficult wartime period. The bank is moving from the founding phase to ongoing operations."

Meanwhile, One Zero announced it is establishing a similar activity in Italy where it intends to hire about 100 employees, and appoint a local CEO. "We specifically chose Italy after extensive research revealed that the banking system there is very traditional, and there is an opportunity for a new player. There are saturated markets, with many digital players, like the UK. In addition, in Italy, a great deal of capital is passing from the older generation to the younger generation, who are left with a lot of money, and outdated banks as their only alternative. They want digital banking but are stuck. This move allows us to grow throughout the EU, and replicate it in all countries," says Bar Dea.

According to the plan, Bar Dea will head a holding company responsible for all branches, and a technology company that will provide the product to the banks. Under these will be the Israeli and Italian banks, which will operate independently. "Establishing the technology company is the most dangerous move for the next two years," he says. "This an entity that must be built from the ground up: a technology company that provides service to just two clients. And the challenge is to make sure that what we develop for one country will be suitable for another."

Meaning that Ber Dea will move ahead and no longer serve as CEO of One Zero. "This was the plan from day one, to build a global bank. We finished a successful first year, so we can move forward. My dream is to build a business here the size of Bank Hapoalim or CitiBank. I told my wife this is a project that will be completed in 15-20 years. It's not by chance that almost all of our investors are not Israeli."

What is the bank’s next target?

"The goal is to become profitable - soon, I hope. This year, we generated income of almost NIS 700 per customer, which is 4x-5x compared to digital banks abroad."

"AI is no bubble. The gains are crazy"

Goshen's company is among the few AI companies engaged in research. "Recently, at Davos, I got to know the term ‘Big Six’: those countries dealing with language models, and we [Israel] are among them. Our reason for founding the company is more relevant today than when we founded it. We thought about where AI is going, and how we could use these powerful models, and the limitations - which additional elements are required to reach the high level of reliability needed for enterprise use," Goshen explains.

In reference to an organization managed through a computerized system, he says, "You can term 2023 the year of pilots. In 2024, our task is to help companies achieve production. This means choosing the right use cases and test cases, to ensure that usage and technology are sufficiently mature."

Since the start of the war, Goshen was among the first to speak out against Web Summit cofounder Paddy Cosgrave, who accused Israel of war crimes in Gaza. Goshen also announced that he would not attend. "We tried to convey business and organizational continuity to our customers. We’re not ignoring the situation in Israel, but want to show that we are supporting our partners, and everything is going on as it should. In terms of reactions from the world, I see more empathy than coldness."

Goshen thinks that Israel needs to do more, "But it’s not for sure that it should come from the state. If we think about how Israeli innovation became a significant part of the technological revolutions, it was through entrepreneurship that had very good ideas and excellent execution, and I think it will be the case this time, too. If the government will assist with research incentives, that will help, but nothing will rise or fall because of it."

Is AI a bubble, in your opinion?

" At Davos, there wasn’t a single [conference talk] sign that didn't have the words ‘artificial intelligence’. This is over-enthusiasm. We haven’t started commercializing and assimilating the existing capabilities. We are in the age of IA - Intelligence Amplification -- not AI, meaning there is still crazy economic value, so we are not in a bubble. The gains are crazy."

Bar Dea agrees, and emphasizes, "We are trying to turn bankers into superhumans. They will be empowered, able to do more things and complete tasks, and get home sooner." If, for example, a customer wants to switch from Ella to a human banker, Ella will summarize the conversation, to save on time and duplication of effort. Ella will also be able to execute financial planning for tasks such as setting up a college fund for one’s child.

Goshen explains the same can be true for other industries: "In the pharmaceutical industry, with AI, it’s possible to take in millions of pages of studies, and gain insights that didn’t exist before, or scan dozens of documents in a particular field to understand the potential between two chemicals, and this can be accessed in seconds instead of hours. Human judgment is a very important element, but when a researcher has such powerful tools, it changes the world."

The Shashua approach: High beams, not low ones

"I get asked a lot why Amnon invested in the bank. After all he's not a banker," Bar Dea says, in speaking about Amnon Shashua. "He told me that he likes to take on big problems that are very hard to solve, and, in his opinion, can be solved with AI. Huge interminable problems - in transport, banking, visual impairments - problems that no one has managed to solve. That is the thread connecting all his companies."

Goshen adds, "There are several more connecting threads, of innovation and science. Using technology to solve very difficult problems. Being pioneers." Goshen shares what he has learned from Amnon. "There are not many people in the world who understand science and algorithmics deeply on the mathematical level, and also have a broad view of the world, and where it is going. This gives a company the ability to think big."

"Amnon and I talked once and he said that most people drive their cars with the low beams on. They look out for the next pothole, and drive cautiously. To be brave, he said, you must have the high beams on, and look to the distance. It's easy to use the low beams."

Mobileye issued a profit warning and the stock plummeted. Does that affect the group or you?

Bar Dea: "First of all, that’s a question for Amnon. But this is an excellent example of low beams and high beams. If Amnon were here, he would say that there are potholes - one quarter like this, another quarter like that - but the emphasis is on the high beams. It’s a matter of character, perspective on leadership, and taking the long view."

Published by Globes, Israel business news - - on February 11, 2024.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2024.

Gal Bar Dea and Ori Goshen credit: Cadya Levy
Gal Bar Dea and Ori Goshen credit: Cadya Levy
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018