AI in Financial Services is growing, but there’s a way to go

It’s funny how the world works. We recently wrote a blog on how AI in Financial Services can improve customer experience. Then, my bank showed me that there’s still some work to be done. Let me explain.

Last week, I received a letter from my bank. It came as a bit of a surprise as I’d agreed that my preferred communication channels with the bank would be email or mobile. Nevertheless, I was interested to know why they were contacting me. What I found concerned me. Inside the envelope was a notification that one of my retirement investments had been renewed.

No one at the bank had reached out to tell me the renewal date was approaching. No one asked whether I was happy with how the investment was performing or whether I wanted to use this as an opportunity to assess all my investment options. They just went ahead, renewed the investment on my behalf and locked me into another five years without consulting me.

I think we can agree what happened wasn’t exactly great customer service. Not only did it diminish my view of the bank, it meant they missed a real chance to cross-sell and up-sell me on their product portfolio. It was clear to me that my bank is still working within silos. Their inability to bring all my information together meant that they couldn’t launch a personalized customer experience for me. Instead, an automated renewal process was triggered and I received my letter.

AI in Financial Services can transform customer experience

Recently, OpenText™ teamed with Finextra to survey the impact of AI in Financial Services companies worldwide. The final report, AI in Financial Services: Next Steps to Realizing the Potential produced some interesting findings, including that 66% of respondents saw AI having the largest impact on customer service and retention in their business.

The findings mirror research from Accenture where bankers identified building customer confidence and trust as the major benefit of AI in Financial Services. In fact, 79% of respondents felt that, within the next two years, AI will work alongside staff as a ‘co-worker, collaborator and trusted advisor’ and, shortly after, it would handle the majority of customer interactions. While I think it will take a little longer for us to reach the level of intelligent automation needed for AI to effectively become the ‘face of the bank’, its role as trusted advisor is completely possible today.

Looking at my bank example above, you can see how AI could have transformed my experience. Instead of receiving a letter telling me everything’s already done, I would receive an alert by email or SMS that the renewal date is coming up. At the same time, the system informs an authorized relationship manager that they should contact me to discuss my options.

The relationship manager sets a time for us to chat and, during the call, the AI system provides all my relevant information to the manager and helps walk us through the renewal process. It shows how things are going and if there are other options that may be better for me.

I leave the renewal process, signed up and happy with my experience. Just as importantly, the bank has taken the opportunity to increase revenue and AI has improved their efficiency and reduced their costs.

In its prediction for 2019, The Financial Brand suggests that simplifying the customer journey continues to be the biggest trend in retail banking. It suggests that the real-time integration of data through the use of AI In Financial Services will be the key technology trend this year. This is because the information silos that have built up in many aspects of banking, such as transactions, savings, investment and loans, have to be dismantled if financial firms are to have ‘the agility and scalability required for the digital age’.

In addition, The Financial Brand estimates that the widespread adoption of AI in Financial Services could save in excess of $1 trillion by streamlining and improving front, back and middle office functions. 

So, where are we today?

Going back to our research with Finextra, almost one in five of our respondents thought that AI was already mainstream in the sector today. Impressively, many of the executives we surveyed stated they were already working for a company that had implemented at least one AI technology. Machine Learning was the AI technology with the most widespread deployment, with over a quarter of respondents already using it. At the other end of the scale, just over 10% of respondents had begun to deploy Natural Language Generation.

While these figures are encouraging, our survey also found that only 3% of companies say that they have implemented all of the listed AI technologies. So, there is still a good deal of work to do. I look forward to the day when my bank knows me and delivers the personalized customer experience I require. Now that really will be a red-letter day!

You can read a full version of our report here.