25 May AI: The new game changer for Financial Services
Artificial intelligence (AI) has been looked at as the new force in the business environment and AI has been proved as the real game-changer for financial services. AI has become the driving new workforce model and has the capability to work side-by-side with humans to deliver greater value to organizations and their customers. Financial services (FS) as an industry definitely benefits from AI transformation.
It is stated that FS firms that are committed fully to AI and human/machine collaboration could boost their revenue by an average of 32 per cent. It can be said that the FS industry is all set and primed for AI adoption. One should look at making AI a constructive addition to the workplace rather than simply coordinating efforts between people and machines. AI implementation would bring with it a whole host of considerations, including ethical ones such as the risk of reinforcing human bias.
While an array of technologies like blockchain, big data and augmented reality is seeping into the industry, artificial intelligence (AI) is expected to be the real game-changer. We can see the first stages of this shift with the use of bots in customer service, but over a period of time AI is going to penetrate into the entire technology stack, automating all those manual processes step by step. When looking at the technology S-curve, AI is most definitely have a profound effect on almost every industry in the world, but for banking in particular.
How is AI being used to address challenges in Financial Services?
Speed, data, and customer satisfaction applications are some of the most effective uses of artificial intelligence in the financial and retail banking world. Due to the highly sensitive nature of the data, banking and financial services have lagged behind other industries when it comes to technological advancements. While every industry is clamouring to impress potential users through advanced ways, banks somehow have not yet joined the bandwagon.
Let us take an easy example to understand how AI affects the banking sector. In the banking sector, the first quarter of the financial year is usually the busiest quarter as the customers open new accounts to align with the start of a new financial year. But for banks, the last quarter is a big quarter to push for new accounts and deposits, mainly to fulfil their annual targets. The remaining two quarters are comparatively less busy.
When the bank applies artificial intelligence to its systems, in the first and last quarters, the system could highlight the details of existing customers who would be likely to need new accounts so that the bank officials can target them. This data-crunching could begin in the last quarter (for first quarter procurements) and in the third quarter (for last quarter procurements). For the second and third quarters too, which is usually the lean period, the prospective clients for new acquisitions could be highlighted. This whole setup is would repeat for a few cycles and the usual cycle of quarters would be disrupted, and acquisitions of new clients would become more uniform through the year.
What the future hold. The impact of AI has already been incredible, and it will only increase from here. Only the organizations that are dedicated to building teams well-versed in machine learning are likely to taste success. The data gathered about consumers and banking customers will give clarity about the tools and services desired. Financial services and banking institutions that create and market that experience are likely to ride the waves of disruption.
Trust in the AI and human relationship
In order to taste success and learn lessons, we need to emphasize the importance of considering the psychological impact on humans and their trust in AI. Automation may seek to eliminate the tasks that humans have been so far and they might fear the loss of their jobs and livelihood. The idea is not to replace humans with AI but to create reinforced intelligence that will help amplify human cognition.
Therefore the future looks very exciting for industries who are using artificial intelligence, and the possibilities seem immense. Financial Services will be one of the industry to be benefited the most and we can say Yes, AI: The new game changer for Financial Services.