Tech geeks already love artificial intelligence. Soon, everyone from marketers to call center agents will perform their duties alongside automated assistants.
A majority of companies now use some form of AI for IT purposes. However, even more businesses expect AI’s greatest impact to occur outside of technical functions by 2020. In the financial industry, where pinpoint accuracy and personalized service are essential, AI will make employees’ lives easier while providing customers with better experiences.
Banking With the Robots
The banking industry with AI looks a lot like the industry without it — only better in every way. Machine learning allows automation software to consume and interpret massive pools of data much faster than any team of humans could.
Internally, this helps bankers prevent fraud and improve compliance. For banking customers, AI could reduce the amount of time spent on the phone with customer support. Further, AI is better able to distinguish between legitimate activity and fraud, which empowers banks to keep customers safer.
While some industries have been reluctant to adopt AI, bankers are ready for the change.
“Today’s AI relies on feeding millions of data points to help complete split-second decisions from mortgage prequalifications to credit limit upgrades,” says Hossein Rahnama, founder and CEO of context-as-a-service provider Flybits. “These mounds of data and the contracts to access them are actually what slow the banking industry down, so it almost seems like a symbiotic relationship that was meant to be.”
Unfortunately, AI doesn’t come cheap. High prices and barriers for compliance have slowed the growth of AI into other business functions. Despite the cost, however, global investment in fintech companies reached $57.9 billion in the first half of 2018, indicating that more effective and affordable options are on the way.
For bankers and their customers alike, AI will bring positive changes to the industry. The big question is, how can each side prepare for the new banking reality?
What Bankers and Customers Need to Know
AI offers the banking industry a wealth of opportunities, but to get the most from their new tools, bankers and customers must learn to maximize the benefits while minimizing negative disruption. Whether you work for a bank or keep your money in one, these tips will help you get the most from the AI revolution.
- Partner with vendors.
Banks want to get customers to open accounts and borrow money. Customers want to enjoy access to capital, high earnings, and low interest rates. AI can help both sides, but proper implementation of AI isn’t always straightforward. Vendors can help banks streamline the process while ensuring customers get everything they want.
Rather than try to let the robots take over on day one, banks should start off slowly with chatbots. That way, they can see how customers use the technology and work out the kinks of integration with their vendors. With the first step accomplished, banks can broaden their AI capabilities to include more robust functionality.
The customer’s role is to provide feedback. Does the chatbot answer the questions correctly? Does the bank’s AI recommend services that make sense, or do they feel more like forced advertising in a new format? The better the relationships, the better the results.
- Prepare for personalized predictions.
Change can be scary. Banks should explain the benefits of the technology shift to their customers to improve the customer experience and boost sales in the process. Customers, meanwhile, should take advantage of the opportunities that appeal to them so banks know where to direct their efforts.
Everyone loves a shorter sales cycle. AI can read between the lines to help deals close faster.
“Technology will speed up sales as it facilitates this change with the most significant alterations coming from reliance on AI,” says Lou Schachter, global sales practice leader at professional services firm BTS. “New systems that can reach out to customers proactively and bring them personalized experiences will yield increased and faster conversions.”
Banks have all the information — they just don’t know how to use it. With AI, if a longtime customer wants a loan, the bank doesn’t need to have that person fill out a bunch of unnecessary forms. AI can do the legwork so the humans can sit down and have meaningful conversations about what they want (and get out the door faster).
- Plan for the more-and-less privacy paradox.
Smarter machines keep customers much safer than pen-and-paper processes. They might not know when a fraud alert comes from an AI program instead of a traditional rules system, but they will appreciate that their data is safer than ever before. Banks get to reduce fraud, while customers get to deal with fewer headaches and false alarms.
AI systems also provide highly personalized service — sometimes in unexpected ways. For instance, most call centers record calls, but few do anything with those recordings. AI could monitor calls and make personalized product recommendations to customers. Some customers might feel unnerved by the intrusion, though, and regulations will require banks to let people opt out if they choose.
At the intersection of AI and banking, everyone wins. Customers have already gotten used to personalized recommendations and chatbots on other platforms, so banking is simply a natural next step. By working together, banks and their customers can enter the new era of machine learning with confidence.
