Martin Linstrom, Managing Director for UK and Ireland at IPsoft, looks at the next stage in technological evolution of the banking industry and how artificial intelligence (AI) will redefine banking as you may know it.

The banking industry has made huge strides to drive innovation by investing in new technologies over the last few decades. Commercial banks first adopted telephone banking, then came online banking and now, for most customers, all your financial services needs could be met via an app. Now, as we enter the conversational era enabled by cognitive AI, customer expectations have evolved once again.

Banks have long been ahead of the curve in terms of elevating the user experience for his or her customers and so, it's perhaps unsurprising that lots of are already looking to AI-powered digital assistants and are investing in cognitive solutions to upgrade and scale customer-facing financial management processes. A lot of lenders are also looking at how they can provide the same simple, frictionless service to their own employees.

As AI-powered customer interfaces gain mainstream acceptance, we'll once again see a revolution in technological change within the banking industry. So, what functions within banks will cognitive assistants transform?

Building a hybrid workforce

Virtual assistants possess a twofold capability which is driving innovation in the banking industry. Firstly, they may be implemented in back office functions such as finance or HR and secondly, they can supplement customer service centres. Developing a hybrid workforce of human employees and AI-powered virtual assistants might help drive enormous cost efficiencies and increase staff productivity. Employees in administrative roles can pass their repetitive tasks to their digital colleague, freeing up their time to focus on more creative or interesting work that requires soft skills whilst customer support agents can pass standard requests with an AI system leaving them with only the most complex of customer queries to deal with.

Ubiquitous customer services

One of the most attractive things about AI-powered customer services for banks is its ubiquity. With virtual customer support agents available 24/7 and through a number of channels such as live message, telephone or email, it's a win-win situation for both bank staff and customers. From a customer's perspective, simple requests such as password resets or international transactions can be carried out in an instant and there's no need to go to the bank or spend an hour or so in a telephone queue to speak with a human agent.

Banks adopting customer-facing AI solutions are in fact seeing increased customer satisfaction rates despite taking out the human-to-human contact element. For example, since implementing IPsoft's AI solution, Amelia, SEB, a number one Nordic bank has been able to avoid 544 hours of escalations to customer care with an average handle time of six minutes. What's more, Amelia has reached an 85% accuracy in immediate intent recognition which has meant a faster service delivery to customers and soaring customer satisfaction.

24/7 banking support

Unlike human agents, digital assistants can function around the clock, seven days a week without any breaks and without tiring. For modern consumers, particularly young digital natives who expect to be able to manage their finances anytime of the day, integrating AI right into a bank's customer service centre will quickly become the norm. Chatbots are already a business standard, therefore at the very least, banks that don't continue scaling this technology throughout their business will find themselves in a severe competitive disadvantage, trailing behind the marketplace by delivering an inferior customer service experience.

Go beyond simple chatbots

Digital assistants with cognitive intelligence capabilities represent the following leap in automation for financial institutions. Digital colleagues like Amelia can now perform tasks above and beyond mere transactional ones, digitising more complex financial management processes for example wealth management onboarding and mortgage applications. Unlike simple chatbots, digital colleagues can also develop their cognitive abilities through an advanced Natural Language Interface (NLI) which could process customer queries asked in countless different ways, including slang. More to the point for the banking industry, they are able to handle context switching to ensure that when a customer moves quickly from one request to another, the interface is able to process both requests without beginning again.

Many banks have already integrated voice capabilities to their finance management solutions. Customers communicate via text or voice to gain quick answers to banking questions, tailored financial advice and can even carry out transactions all in the same channel. Voice-enabled digital assistants can handle payments and transfers, credit card activation, charge disputes and travel alerts for purchasers at any time, freeing up customer services teams to pay attention to more complex customer enquiries and giving customers full control and access to their finances. Conversational AI will become more and more widely accepted as banks start to harness the technology to help drive customer engagement and operational efficiencies.

Delivering better insights and improved security

Unlocking key business insights is another key driver motivating banks to purchase AI. Sophisticated systems can recognise patterns in the sheer amount of data that they are processing. Thanks to these capabilities, businesses can easily find out the most common types of transactions by customers of the certain demographic and can then retarget this group for specific marketing or sales campaigns, helping to drive revenue. These real-time insights can help business leaders make better, more strategic decisions which are informed through concrete data.

Real-time data mining can also be applied to improve customer security as many AI tools have built-in privacy and security by design. An AI-powered virtual assistant can pick up on irregular payments immediately, flagging potential “phishers” to some human agent for additional authentication. What's more, advanced machine learning solutions can improve over time so that banks can continue to scale up their services. Virtual assistants like Amelia can go one step further by 'learning on the job.' Essentially, when Amelia does not understand a request or query she can pass it on to a human colleague but remains within the conversation to learn how to resolve the issue next time.

The future of retail banking

The financial services industry has long been at the forefront of technological innovation. Whilst many businesses are still debating whether to invest in AI, major banks are extremely much leading the way to invest in the technology and are thriving as a result. As virtual assistants become increasingly more intelligent and their cognitive abilities develop, the expectations for banks and the services they offer will be elevated. Banks that rest on their own laurels and refuse to acknowledge this risk falling behind permanently, particularly with the slew of challenger fintech companies that are appearing on the market, offering dynamic and tailored financial services for less money.

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