Artificial intelligence (AI) is quickly becoming a commonly used term for financial services firms around the globe. The phrase—AI—tends to make some people tremble in their shoes as they feel we’ll have an apocalyptic situation on our hands where robots take over the world. Aside from the Steven Hawking and Elon Musk doomsday predictions, AI’s place within the financial services world is meant to pull together multiple technologies to analyze data, foresee solutions, and make decisions.
Financial services firms are collecting more data than ever from their customers. Big data is this century’s currency, similar in value to gold. Similarly, financial institutions are collecting and sitting on a goldmine of data with questions on the best way to effectively use the information in a way that brings value to members. Using AI, institutions can more quickly discover trends within the data to better serve their accountholders and provide relevant information to make their lives better.
AI to Advance the Customer Experience
Innovators and early adopters will be at the forefront to use AI to improve financial institution customer experiences and streamline processes. So, what does this look like? Financial institutions could soon be using AI to interpret transaction data of their accountholders 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.
Robo-advisors in the wealth management field are beginning to surface, providing automated portfolio management at some financial institutions. The bots analyze a person’s portfolio, risk tolerance, and previous transaction behaviors to help planning and growth. Wealth management firms are looking to AI to help offer a more tailored experience for their investors.
AI bots are used in many service-related businesses, however, early adopters in the financial services sector are applying chatbots with natural language processing (NLP) to quickly connect customers with information. If an NLP bot is unable to accurately answer a customer’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.
A PricewaterhouseCoopers report on the use and potential of AI found that reviewing transactions for compliance was a likely use case for financial services firms. Report conclusions show 16% of top financial services firms surveyed said they are either in the process of widespread adoption or have completed the adoption process of AI. Another 57% of respondents said their firms have not implemented the technology, but have researched and completed one or more proof-of-concept tests.
Integrating AI technology will help financial services firms recognize accountholder patterns and have the potential to move institutions from a reactive to proactive customer model. It will be fascinating to see how the industry progresses and adapts to this next evolution of technology to meet expectations and improve the customer experience.
A version of this article was originally published on CUES, May 2017.