If you had to make a list of some of the most disruptive technologies impacting the financial services industry today, artificial intelligence (AI) would undoubtedly be right at the top.
Analysts are already predicting that AI will save the entire industry as much as $1 trillion by as soon as 2030. This may seem like an enormous shift with regards to the way things are currently done, but in reality it’s more straightforward than you probably realize.
By better understanding the importance of artificial intelligence and AI tools use in financial services as it exists today, you’re therefore in a better position to learn more about where the entire industry may be headed tomorrow.
The Challenges That the Financial Industry Bring With It
Large financial institutions in particular have a massive customer success burden – they always have, and they likely always will. As technology continues to evolve and most organizations look for new and efficient ways to combat this, they’ve naturally turned their attention towards things like chatbots.
Part of the danger of this increased reliance on automation, however, has to do with a general fear of reduced loyalty thanks to less personal contact than ever. Customers over a certain age in particular LIKE being able to walk into a bank and discuss their problems with a living, breathing human being. Even though handling the same problem and getting the same outcome is faster and easier via a chatbot, this isn’t necessarily their preferred method.
But whereas automation and artificial intelligence have created this problem, savvy financial services organizations (and the artificial intelligence services organizations they’re partnering with) are actually using the same technology to solve it. In fact, many banks are using AI to actually INCREASE client satisfaction, improve efficiency and maintain customer loyalty – all at the exact same time.
A 21st Century Tool for 21st Century Companies
Take Bank of America, for just one example. They’ve already developed a powerful AI-enabled chatbot called Erica that not only provides financial guidance for the bank’s clients through both voice and text messages, but that is also available 24 hours a day, seven days a week, 365 days a year.
It can easily perform day-to-day transactions, thus allowing clients to have access to essential services at absolutely any time – all while allowing Bank of America to actually reduce costs associated with hiring real people to fill those customer service personnel positions.
Bank of America is hardly the only company experimenting with this type of artificial intelligence technology. Across the board, chatbots and similar solutions help to guarantee that even less-typical questions have ready-made responses, versus the current status quo where human advisors often have to go hunting for information and consult with experts, only delaying the gratification a customer is after.
Using AI Technologies to Improve and Personalize the Customer Service Experience
It’s also important to note that artificial intelligence is being used by many financial services organizations to not only increase the efficiency of customer service experiences, but to improve the personalized nature of their offerings.
Transactional and other data sources, for example, can be tracked using data analytics to help a bank better understand not only customer behaviors, but also preferences. It puts businesses of all types in a better position to not only identify WHAT a customer is trying to do, but HOW they would actually like to do it.
A bank can then enable that, thus changing the way their services are delivered as opposed to making users give up their preferences to make up for the limitations inherent in a very limited service offering.
Compliance, Fraud Detection, Anti-Money Laundering and Beyond
Financial institutions organizations are also using artificial intelligence to help quickly identify fraud and other situations that may harm their bottom line.
Citibank is just one example of a major financial services company that is using machine learning and big data to prevent various criminal activities, thus monitoring potential threats to both their customers and their larger brand at the same time.
If you can train artificial intelligence to understand the way things SHOULD be working, it can therefore also quickly recognize when suspicious activity takes place. That insight allows human employees to step in and stop a small problem today before it has a chance to become a far bigger (and more expensive) one tomorrow.
The Power of Process Automation
Keep in mind that one of the concepts at the heart of artificial intelligence has to do with the ways in which it “learns” from past data. In financial services, there is an incredible amount of that historical information to draw from – bookkeeping and records keeping are second nature to the business.
Therefore, it makes sense that process automation is also one of the biggest advantages that AI has brought to the financial services industry. By going through those massive volumes of historical data, these types of tools can be trained to provide better, faster and more efficient solutions to routine administrative problems. They can even handle most administrative tasks with the accuracy of a human, too.
This of course frees up the valuable time of those living, breathing employees to focus on the initiatives within a company that help propel it forward or create a true competitive advantage in the marketplace.
There are other ways that financial services companies are using AI, too, that haven’t been mentioned here. Banks in particular are regularly employing artificial intelligence and machine learning models to help enable everything from risk assessment to the improvement of their financial advisory services to better trading and beyond.
The key thing to understand is that all of this is happening while AI is still relatively young as a technology. If you think about how far artificial intelligence in the financial services industry has come in even the last five years, it’s truly exciting to think about what the next five might have in store for us all.
If you’d like to find out more information about the importance and use of AI in financial services, or if you have any additional questions you’d like to see answered in a bit more detail, please don’t delay – contact Pegasus One today – the leading AI development company in California.