AI and machine learning are breaking down silos that hold Financial Services firms back from … [+] 70% of all financial services firms are using machine learning to predict cash flow events, fine-tune credit scores and detect fraud according to a recent survey by Deloitte Insights .
84% of enterprises believe AI has the potential to create and sustain a competitive advantage, while just 23% integrated AI into core processes, products, or services .
AI and machine learning are enabling fintech startups to outmaneuver their larger Financial Services competitors, attracting new customers who become loyal based on services traditional banks don’t offer.
Aligning the production of AI with the consumption of AI increases the probability of success according to a recent MIT Sloan Management Review and Boston Consulting Group study.
AI and machine learning are reordering the Financial Services landscape, navigating an entire industry back to its customers. Fintech is forecast to achieve a compound annual growth rate (CAGR) of 25% through 2022, reaching a market value of $309B. The broader financial services market expected to reach $26.5T by 2022, achieving a 6% CAGR. AI and machine learning are the catalysts that every organization in Financial Services is either adopting or evaluating to break down silos, automate processes and remove barriers between themselves and their customers. In short, AI and machine learning deliver valuable new data and insights about customers and their needs that traditional Financial Services firms could not see before. The following graphic from the World Retail Banking Report, 2020 by Capgemini and Efma, reflects how traditional banks and financial services firms are not capitalizing on the data richness they have available to them. AI and machine learning are enabling startups and fast-moving cloud-based enterprise software companies, including FinancialForce, to capitalize on this gap.
Financial Services Needs A Customer-Driven Digital Transformation
In recent discussions with CIOs and senior management team members at Financial Services firms, a few of which are former students of mine, the topic of how AI and machine learning is revolutionizing the financial services landscape came up. Concerned about how quick Fintech startups are infringing on their current services, a few of the CIOs are starting their innovation hubs internally. The most valuable takeaway from the innovation hubs so far: existing systems architectures can’t deliver a 360-degree view of customers and provide real-time responses across all services today. “We’re looking at how we can use AI and machine learning to integrate across data and system silos that were designed decades ago for much simpler business models,” one CIO said recently. “AI and machine learning are what we’re relying on to slice across all silos and provide real-time, drill-down financial reporting for our enterprise clients,” another said. […]