There is huge amount of noise currently about the use of artificial intelligence (AI) in the financial services sector. Every fintech application or new piece of banking software must be accompanied by bold claims about its use of AI, even though in many cases they are simply upgraded algorithms.
It would certainly be beneficial if we had an AI application that could cut through the spin and present us with only what is relevant to the specific requirements of our job or organisation.
In truth, such advanced filtering applications are already available. They are just one of the AI-driven applications that are going to transform the way customers view financial organisations, especially in the retail banking and lending sector.
What could be more timely in the UK when the Competition and Markets Authority’s open banking revolution is placing greater requirements on banks to use technology for more effective engagement with customers ? It all adds to the competitive pressures as new challenger banks and fintech companies enter the banking and lending market.
AI will change banking
As they compete in this intense atmosphere, financial organisations will quickly find they must embrace AI, given the range of applications now operational, such as chatbots, virtual assistants or automated personalised review summaries .
Analysts at Gartner have forecasted that more than 85% of customer interactions will be managed without a human by 2020, while AI market research specialist TechEmergence believes that chatbots will become the primary consumer AI applications over the next five years.
There is indeed every reason for banks to deploy chatbots to engage with customers seeking help or information, just as H&M’s Kik app, recommends outfits to shoppers based on the style of clothes they prefer. Banks and insurers know their customers far more intimately than fashion retailers and with AI to analyse the data, can make highly relevant recommendations about financial products and services.
AI solutions can also head off potential problems before they develop, learning to detect the ‘distress’ signals and react accordingly. The technology is a huge driver of efficiency in customer-service, facilitating rapid expansion and keeping a lid on recruitment costs. The use of chatbots and other virtual assistants, for example, reduces what is often heavy and costly staff-turnover in call centres by removing tedious tasks from the work of customer-service agents. […]
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