In the past few years, AI has added value to financial institutions in a number of areas, including credit risk management, risk and finance reporting, trading floors, customer relationships and of course, security. However, this is just the tip of the iceberg and in 2019 AI has the potential to revolutionize banking and redefine how banks operate.
As 2019 approaches, we look at the areas in which financial institutions will benefit from AI in the coming year.
Chatbots and Virtual Assistants
Chatbots and virtual assistants look set to have a major impact on the way banks interact with customers in the coming years with Gartner expecting that by 2020, consumers will manage 85% of their total business interactions with banks through fintech chatbots. The potential impact of this technology will be welcomed by banks as research suggests that by 2022, chatbots and virtual assistants will save companies $8 billion per year.
These statistics are bound to be of some concern to the banking workforce, however that needn’t be the case as banks seem to be looking to AI as a tool to alleviate pressure points and empower the workforce, rather than as a replacement for employees. According to EY, jobs are likely to be reshaped rather than lost as banks retrain and reskill employees to understand how AI can be effectively applied. Similarly, Accenture predicts that banks that deploy AI wisely will see a 14% increase in jobs.
Since Santander became the first UK bank to launch voice banking technology back in 2016, a large variety of global banks have followed suit. In the coming year, natural language processing is likely to be the next on the bank’s agenda, meaning it’ll only be a matter of time before virtual assistants come into use.
Security and Compliance
AI’s ability to continuously learn from the data it is supplied with, hence refining its decision-making processes over time, is one of the major benefits to banks. Cybersecurity and regulatory compliance are hot topics for the financial services sector and AI can add real value in both of these areas. Machine Learning platforms can be coded to identify user patterns and detect anomalous network behavior, something that’s increasingly essential as cyberattacks are often disguised with normal looking data.
Driving Customer Insights
Our recent study of SMEs in the UK and US revealed that less than 20% of SME owners thought that banks they had dealt with over the past year fully understood their needs as a business. This demonstrates a clear disconnect and lack of engagement between banks and their smaller customers. Intelligent automation could be the much-needed solution here.
In 2019, automated data collection can ensure bank relationship managers are better equipped with in-depth knowledge about their customers and are therefore best positioned to support their business and provide a better service.
Technology is increasingly helping shape customers’ wants, needs and expectations and with a new raft of regulation encouraging the use of technology in banking, there’s nowhere left for anyone to hide. The technology revolution is in full swing and for banks, it’s very much adapt or die.
This year, we can expect to see more banks turn to fintechs for support as they begin to recognize the opportunities AI presents their organisation. Failing to embrace this new technology at their disposal could prove to be a risky move. Ultimately, the diversity and understanding of both technology and customer relationships offered by fintechs are just what banks need to capitalize on the exciting ways in which technology can improve their offering in a competitive industry.