ARTIFICIAL INTELLIGENCE: how it’s transforming financial services today
As customers and employees demand better and faster ways to engage, organizations are turning to digital technology to help them transform, remain competitive and grow. For many firms, this means improving how they interact with—and meet—customer needs. In fact, customer experience represents the single best opportunity financial services firms have to deliver on their priorities, according to a survey by Econsultancy. What’s more, 45 percent of respondents indicated that making the customer experience as personalized and relevant as possible is their key focus. CEOs around the world are not asking if digital disruption will occur, but instead, what it means for their business. In this article, Josh Sutton explores how financial institutions can leverage digital transformation to advance their competitive position, strengthen customer engagement and improve performance. Increasingly, it has become apparent that artificial intelligence (AI) may very well hold part of the answer.
For the past 15 years, drivers of digital transformation have come in the form of information accessibility—initially by way of the internet and subsequently via mobile devices, principally smart phones. The most recent wave of transformation is enabled by information insight—providing consumers with products and services that meet their needs when and where they need them. For financial services firms, to provide such products and services requires the ability to collect and analyze vast amounts of structured and unstructured data and use those insights to inform portfolio and new product decisions, as well as take action in real time and fuse together multiple technologies and strategic solutions. The successful firms of tomorrow will be those that use this information insight to provide their customers with an experience that is personal to them and delivered on their terms. Moreover, they will harness information insight from the outside in—from the perspective of their customers—as opposed to inside out, via traditional divisional and product silos.
Several market leaders already are applying AI to accelerate customer-centric transformation via insight generation, customer engagement and business acceleration.
Insight generation involves extracting meaningful and actionable intelligence from ever-increasing quantities of available raw data. With the amount of information in the world nearly doubling each year, it is no surprise that data complexity is the top challenge standing in the way of digital transformation, according to preliminary results from a study by FORTUNE Knowledge Group and Publicis.Sapient.
One of the fastest growing uses of AI is to listen to all customer communications, both directly with a company and about that company in the market at large—ranging from call center conversations to chat sessions and even social media activity. AI tools are able to perform what no single human—or even a team of people—could hope to do. They can read, review and analyze vast quantities of disparate data, providing insight into how customers feel about a company’s products or services and why they feel the way they do.
Similarly, financial services firms can use machine learning to enhance their investment research. For example, firms can analyze foot traffic at an individual set of retail stores or compare the current number of hours worked at a manufacturing company to the last week or quarter in real time to identify what a company’s performance might look like before itís announced.
They can also use AI tools for risk management and compliance purposes. For example, a leading financial institution is proactively assessing risk by using AI to review all of the activities undertaken by traders that have made suspicious trades.
Engaging customers on a deeper, more personal level has long been the holy grail for marketing and CRM programs. Today, AI is radically enhancing the personalization of information that fuels such engagement. Nowhere is this more evident than in AI’s next big thing: chatbots and virtual assistants.
Chatbots are software programs that use messaging as an interface through which companies can help their customers answer questions, find information and offer personalization. They are ideally suited to a mobile platform and have been made significantly more powerful by advances in machine learning and natural-language processing. Multiple companies such as Viv, Facebook and Nuance are providing frameworks and turnkey solutions in this space, allowing for services as diverse as media content distribution to customer service support and customized marketing campaigns.
The financial services industry has already begun leveraging Bank Bots to help reduce the cost to service customers, provide added value through personalization and encourage deeper engagement. Today, customers use Bank Bots to ask questions about their accounts and to make payments. But as the technology evolves, so will the functionality. In the future, Bank Bots will fully leverage consumer data to offer deeper insights and advice.
For instance, in the wealth management space robo-advisors have begun to provide much more substantive advice and recommendations based on a person’s portfolio, risk tolerance and previous actions. In the same way a good financial advisor would proactively reach out and advise what a client should be thinking about, this type of virtual assistant technology will continue to grow more intuitive and insightful.
Business acceleration refers to how companies use AI to expedite knowledge-based activities to improve efficiency and performance, such as financial institutions creating investment strategies for their investors. While this type of activity is often viewed as an opportunity to reduce costs through the automation of internal processes, it should also be considered in terms of the firmís ability to transform the customer experience. For example, if a bank can use AI to minimize the time it takes to approve a loan, it not only reduces its own costs but also provides an improved customer experience. As a result, when todayís market leaders deploy AI tools, such as Watson from IBM and Cyc from Cycorp, it is with both cost-cutting and customer satisfaction in mind.
AI is no longer a technology of the future. Financial services firms are actively exploring the technology and identifying practical ways it can impact the business. Some are already using it. This adoption is echoed in the growth the AI industry is experiencing—a rate of 56 percent annually, according to Tractica. Additionally, one in four (25 percent) of todayís jobs are expected to be impacted by AI technologies by as soon as 2019, according to Forrester.
True digital transformation, however, requires more than simply applying the latest and greatest technology. It requires a customer-centric, outside-in perspective to enable the design of digital solutions that drive customer loyalty, engagement, consumption and satisfaction. AI could be the key to providing the tools, insight and acceleration that enable tomorrow’s market leaders to thrive in this environment.
Interested in learning more about AI? Watch our on demand webinar, AI Meets Data Management, hosted by FIMA and featuring Josh Sutton, VP and Global Head of the Publicis.Sapient Artificial Intelligence Practice and Dr. Catherine Havasi, CEO and Co-Founder of Luminoso Technologies Inc.
Econsultancy, Digital Transformation in Financial Services: challenges and opportunities, https://econsultancy.com/blog/66536-digital-transformation-in-financial-services-challenges-and-opportunities/
Josh Sutton is a VP and Global Head of the Publicis.Sapient Artificial Intelligence practice. In this role, he is responsible for leveraging big data tools as well as correlation-based and causal-based AI platforms to help clients transform their businesses. He works closely with our clients to ensure that we align the right tools and platforms with their business objectives. Josh also serves as a member of the executive leadership team for Publicis.Sapient’s Business Transformation Services group and on the board of directors for NPower, a New York based non-profit.