March 20, 2020
Just a few years ago, the very concept of AI used to paint a picture of a 'distant' future – one filled with robotic, life-like machines, working at light speed. If you still think like this, then we'd urge you to think again.
Mountains’ worth of research has already been conducted into understanding how AI is shaping our future and re-shaping our past. In this article, we will dive into how AI is driving ’traditional and conservative’ sectors such as Banking and Finance. There’s plenty that can be achieved if AI is used strategically, so let’s jump right in.
1. Dual Benefits: Reduced Costs & Higher Profits
The aggregate potential cost savings for banks from AI applications is estimated at $447 billion by 2023. The use of AI in Banking can be attributed to three channel modes:
Key takeaway: AI lowers the call center’s workload and helps tackle routine tasks such as check balances, schedule payments, etc., thereby reducing costs.
2. An Optimized Process: The Only Game-Changer You Need
One of the most significant advantages of AI for the Banking and Finance sectors is automation. More specifically, automation in digital banking processes. With the ever-increasing competition in the financial market, improving operational efficiency has emerged as the need of the hour. In addition to this, AI helps to:
Did you know? According to a survey, executives are looking at AI to alleviate repetitive, menial tasks, such as paperwork (82%), scheduling (79%), and timesheets (78%) in the immediate future.
3. AI, an Intelligent System for Offering Personalized Offers & Boosting Customer Retention
Providing insightful offers and personalized financial advice based on customer preferences is a move that can pay significant dividends (pun intended).
Let’s look at a real-life example to understand this at length:
As you can imagine, efforts like these fortify customer relationships and help build a fool-proof user base – the ultimate goal of all Financial Institutions.
Key takeaway: AI-driven apps and smart services can help users track income, expenses, as well as spending habits. These ‘financial buddies’ can then offer optimized, unbiased plans, and real-time financial tips so that customers can move towards a more secure future.
4. Improved Service for a Flexible, Specialized Customer Experience
Intuitive. Instant. Improved.
These three words best describe an AI chatbot’s relationship with customers. More users today are actively embracing AI as it helps to:
Did you know? Pepper, HSBC’s Robot in New York, which helps customers with opening accounts, cracks jokes, and relays credit card details!
Key takeaway: If you’re looking to improve your bank’s customer support services and truly keep customers at the forefront of your innovation, digitalization will emerge as an inevitability.
5. The Role of AI in Portfolio Management
"Data-driven investments closed in on a trillion dollars in 2018."
In the trading world, if you don’t have the upper hand, you might as well shut up shop. This is where AI can help. It allows traders to use machine learning (ML) software solutions that can compare multiple databases, conduct thousands of transactions within minutes, and monitor risk – all at the same time. In addition, it helps to:
Did you know? Bloomberg has launched Alpaca Forecast AI Prediction Matrix, a price-forecasting application for investors, powered by AI.
Key takeaway: AI can double up as a portfolio manager’s loyal assistant and implement critical tasks with relative ease, such as managing risks, picking stocks with the best ROI, etc.
All said and done, getting your hands on a robust AI system and embracing disruptive-minded FinTech technologies are no longer a distant dream. Remarkably, even the change-resistant Banking and Finance domains are accepting this new technology and minting its worth at a premium, as it puts convenience, smart services, and customers at the helm of financial services. So what do you think?