Since the onset of the digital revolution in the 1990s, FinTech has played an increasingly vital role in streamlining operations for financial institutions. From online bill pay to mobile banking apps and biometric security features, technology is now a dominant factor in the way account holders interact with their financial service providers. In the past decade, this technology has been driven more and more by software and platforms that use artificial intelligence (AI).
AI allows institutions and lenders to leverage multiple technologies to analyze data, foresee solutions, and make decisions. Now that most banking has gone digital, financial institutions are seeking to fine-tune their AI strategies, which will drive the adoption of AI technology even further in the industry.
Because it greatly increases efficiency, AI technology can help reduce expenses for financial institutions. In fact, AI is projected to reduce bank operating costs by 22% in less than 10 years, potentially resulting in $1 trillion in savings by 2030. In this blog post, we’ll discuss how AI tech is helping financial institutions increase efficiency, reduce costs, and improve their account holder experience.
The Power of AI Technology
AI technology is driving efficiency in the financial services industry. According to a 2020 McKinsey study, “Across more than 25 financial service use cases [including risk management, finance, IT, HR, and compliance], AI technologies can help boost revenues through increased personalization of services to customers (and employees); lower costs through efficiencies generated by higher automation, reduced errors rates, and better resource utilization; and uncover new and previously unrealized opportunities based on an improved ability to process and generate insights from vast troves of data.”
Putting Data to Work for You
Big data is this century’s currency, similar in value to gold. Financial institutions are collecting more data than ever from their account holders, which means they are sitting on a goldmine of information. This information can contain clues about improving your account holders’ experience, including their preferred communication channels and payment options. Using AI, FIs can quickly discover trends within the data to better serve their account holders and provide relevant information to make their account holders’ lives easier.
Using AI to Enhance Your Account Holders’ Experience
Innovators and early adopters are already using AI technology to improve account holder experiences and streamline processes that tend to take up a lot of their time. So, what does this look like? Financial institutions could soon be using AI to interpret transaction data of their account holders to better understand their spending habits. Doing so better positions the institution to provide their customers with a higher level of attentiveness and customization by, perhaps, providing alerts on spending, offering recommendations to save more, and providing account holders with best practices on how they can improve their financial well-being.
Helpful Chat Bots Cut Down on Internal Resources
Innovators in the financial services sector are using AI chatbots with natural language processing (NLP) to quickly connect borrowers with helpful information. This allows account holders to self-serve when it comes to answering frequently asked questions and troubleshooting common problems. If an NLP bot is unable to accurately answer an account holder’s inquiry, the question is passed along to a real-life service representative to assist. In some examples, AI can even monitor along and “observe” how the human solves the customer inquiry so it can learn and better serve the next individual.
Integrating AI technology today will help financial institutions stay ahead of the ever-moving technology curve. It will be fascinating to see how the industry progresses and adapts to this next evolution of technology to meet expectations and improve their account holders’ experience.
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