The Impact of AI in Financial Services

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Estimated reading time: 5 minutes

AI has shaken up every industry from transportation to retail, redefining the lengths companies must go in order to maintain competitive. Beauty brands have incorporated augmented reality into apps, allowing customers to virtually test the latest summer shade of lipstick, automakers are developing self-driving trucks to improve productivity, fuel efficiency, and traffic on highways, and the healthcare industry is using AI and MRI image recognition to drastically reduce stroke diagnosis times.

The financial industry is projected to benefit the most from AI over the next few years through incorporating solutions like customer service automation tools and fraud detection technology. In fact, analysts estimate that AI will save the banking and financial services industries more than $1 trillion by 2030.

The prediction for a strong future in financial services has created an industry flooded with competition. From innovative companies revolutionizing the ways we make payments, to enterprise giants like Amazon and Facebook working to break into the industry, companies must innovate and focus on providing exceptional customer experiences to keep their heads above water.

Understanding the emerging roles of AI and machine learning, as well as how consumer preferences have shaped both CX and digital products, arms business leaders with the tools they need to creatively determine ways to improve and prevent customers from deflecting.

AI Adoption in Financial Services

What’s the current state of AI adoption among the financial industry? Put simply: It depends. The industry is a complex machine with many moving parts, and each sector has its own views and strategies regarding implementing the rapidly advancing technology.

While AI and machine learning have enormous potential to reduce financial fraud and improve CX, loan and mortage sectors are more cautious, as they believe AI can increase bias due to incomplete data sets used to train machine learning (ML) models.

Digitalization in Banking: Brick and Mortars Are Here to Stay

As digital disruption occurs at every level, bank branches are still extremely valuable to customers. According to a survey conducted by Deloitte , customers prefer bank branches over all other channels for opening accounts, and report that branch experiences influence the customer experience more than online or mobile channels.

Customers leave feedback about their experiences and overall satisfaction across countless channels, including surveys, social media, by calling contact centers, and interacting with chatbots or AI personalities. Knowing their unstructured feedback holds unique insight on ways to improve and remain competitive, it’s crucial to make sure you’re analyzing all of it.

Our AI-powered platform helped one of our Fortune 500 financial services clients analyze omni-channel reviews in real time, increase CSAT scores to 92%, predict feedback for 95% of its customer base who didn’t respond to surveys, and decrease handle time of contact center calls by 20%.

AI Assistants and Personalized CX

According to Gartner, 25% of customer service operations will use virtual customer assistants, like chatbots, by 2020.

In 2018, Bank of America launched Erica, the company’s digital assistant powered by AI. It uses predictive analytics and cognitive messaging to help customers make payments, check balances, save money, and even pay off debt. About a year after Erica’s launch, seven million of the bank’s 27 million active mobile users have activated it.

JPMorgan Chase recently launched a mobile app called Finn- to help the bank attract digitally native customers who didn’t require branch-related services. While this showcases how banks are searching for creative ways to personalize user experiences and better understand customer behavior by deploying AI-based tech, Finn was shut down nine months after launch due to being deemed unnecessary given that the bank already provided all the same features.

While overall sentiment about chatbots seems to be mixed, Erica and Finn represent a shift in how consumers prefer to interact with their banks. A Forrester analyst recently stated that while AI has the potential to greatly improve the customer experience in financial services, the experience with chatbots could use some improvement.

FinovateFall 2019

Are you ready to learn more about the impact of AI in financial services and how It can benefit your company? We’ve been selected to present our platform at FinovateFall 2019, the world’s most influential fintech conference which showcases the most successful and innovative banking and financial technology. To learn more about the event and to register, click here.