As the discussion around digital transformation of industries kicks off in earnest today in at the annual World Economic Forum in Davos, none stand to face as turbulent an upheaval as financial services. The potential re-invention of industry models and re-definition of operational benchmarks made possible by Artificial Intelligence comes not a moment too soon for a sector being pressured from all sides to let go of its many outdated structures.
Banks, in particular, are caught between an urgent need to reduce cost while absorbing the demands of mounting compliance regulations. A constant stream of new entrants such as Bank Simple, Kabbage and Future Advisor are shaking up the competitive market and tapping into the frustration of customers who want the same kind of round the clock, tailored engagement to which they’ve become accustomed when interacting with the new breed of digital services they rely on in other parts of their lives.
If banks want to become truly customer centric they will need to play catch up with technology innovations. For example, market leaders are asking whether machines can fulfill roles previously dependent on humans for decades.
Virtual agents, like Amelia, mean that interactions with customers can be reciprocal, conversational and pleasant. Just like any new hire, Amelia can be taught the processes and procedures she should be following using natural language (rather than programming language). More importantly she can build on the experience of the best agents in the field and quickly become one of the bank’s most knowledgeable, high performers and able to continue a personalised conversation with every single client.
Instead of struggling to train large, dispersed workforces to comply with continually evolving waves of regulation, cognitive technologies are being recognised as the most efficient way to address compliance obligations. Digitising more customer interaction will ensure a complete audit of the process is available at all times and critically ensure that compliance is embedded into the process from start to finish and adhered to without exception. The agility of machines to absorb new regulations or leverage the ever growing mountain of customer data accessible online to make faster decisions, more informed decisions about how best to service customer needs makes digital agents an essential part of the team.
Just think how dramatically the cost of advice will fall when AI is applied to the task. Whether AI assists humans or takes on a massive proportion of standard queries the time it takes to tap into customer interest will shrink from hours to seconds. Add in the dimension of mobile based technology and you can see entirely new opportunities unfolding for cross selling and up-selling based on more timely understanding of customer need.
Looking at cost to serve through the lens of an AI-enabled organisation will be like seeing the world in colour after years of black and white. How pricing and risk will be tuned to this new state of operational productivity is for a new wave of financial managers to define.
There has been an increase of more than 400 million people using some form of intelligent digital assistant over the last five years. But as cognitive technology comes into maturity our appetite for having our digital friends make everyday a little easier will soar. I’m hoping today’s panelists show an eagerness to embrace AI’s potential and consider the positive implications it has for releasing new value into the economy.