Artificial Intelligence (AI) is transforming financial services and disrupting traditional ways of doing business and interacting with customers. Technology is opening the door to new operating models, introducing competitive dynamics that will reward forward-thinking entities and punish those who are not able to keep up with the momentum.
For the Western economy, AI looks promising. Britain’s GDP will be 10 per cent higher in 2030 at £ 232 billion.
And yet, 40 per cent of the leading organizations in the UK say that their most senior personnel are not fully digital and 65 per cent say that business stakeholders do not have the skills to manage AI. In addition, 86 percent believe AI will make the business more effective but do not yet know how to implement it, with more than 92 percent agreeing they need to evolve from their existing business model . Obviously, there seems to be a difference.
I have recently conducted research with the London School of Economics on the potential AI client in financial services. I interviewed 19 officers to get their views on their challenges and opportunities.
Chatbots in the financial industry
The man is looking at his mobile phone on the street. Another topic that was top of mind among the financial services C-suite was chatbots. Today Microsoft’s Cortana already gives customers the experience of changing the path to purchase strategies banks have tested in the early days with ‘automated attendants’.
However, the real future lies in messaging, with more monthly active users than social networking apps, including the top three, WhatsApp, WeChat and Viber. Has approximately three billion users combined.
According to research conducted by Credential Research, chatbots have the potential to leapfrog mobile apps to become a major medium for digital communication. The global chatbot market is driven by technology development such as natural language processing, customer intelligence, and integration with enterprise systems.
In the financial services sector, technology is continuously assisting financial advisors with investment bots used by banks to reduce costs and eliminate potential human errors. This means that purchasing decisions will be made faster by computers.
There are some predictions that the introduction of robo-advisors almost eliminates financial advisors from the investment process. Predictions are that customer engagement with bots will only increase when people become more comfortable disclosing financial information when talking to bots in a confidential manner.
But is this the right way? Not necessarily, according to some industry leaders. “Maybe the world doesn’t want a robo-advisor. Just because you can do something does not mean that you should lead a strategy at a European bank.
Enhancing Customer Experience
With increased connectivity, financial services are impacting the customer journey from several touch points. Capitalizing these moments simply requires understanding which offer and which channel performs best to understand the context of customer interactions.
This example below shows customer intent and data touching points:
Personal financial planning, fraud detection, money-laundering and automation of customer functions provide opportunities to enhance the customer experience.
According to the vice president of technology at an American bank: “AI allows us to understand your money better – can we classify your transactions, can we return to you what you can show us in a practical way, Can we predict what’s going to happen in the next few days. For maximum long term value? ”
Fundamentally, this requires optimization of tailoring services, preferences and offers. This includes aspects such as the appropriate loan limit and interest rate for a customer or purchase. The ultimate goal is to scale individual offers with the use of technology, and although the opening days are there, the results look promising.