Intelligence everywhere: How AI is transforming financial services
In a world where machines are financially savvy, customers are demanding more than ever from their banks, insurers and financial advisers
Photo by William Iven on Unsplash
“The future is not an either/or scenario. Rather, it is an ampersand—humans & robots,” said a recent Accenture report—The New Face of Wealth Management in the Era of Hybrid Advice. “One-size-fits-all models are a relic of the past.”
But navigating this world of man and machine is proving increasingly fraught with questions for financial services providers—many of whom are still yet to come to terms with the uptake of AI across the sector.
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In fact, research conducted by natural language generation (NLG) firm Narrative Science together with the National Business Research Institute found that 12 per cent of the financial services executives surveyed weren’t yet using AI “because they felt it was too new and untested, or had concerns about security”.
“No sector or business is in any way immune from the impact of AI."
Likewise, only six per cent of those surveyed said they had “a clear innovation leader or executive dedicated to testing new ideas”—surely serving as a barrier to adoption in the first place.
Despite this, the rising tides of AI show little signs of receding anytime soon. And, if the words of PwC’s global data & analytics leader, Gerard Verweij, are to be believed, “No sector or business is in any way immune from the impact of AI”.
So, what does this mean for the future of financial services?
When it comes to implementing AI and automation technologies in such heavily regulated sectors as banking, financial services and insurance (BFSI), success lies in helping—not disrupting—business, said Narrative Science’s director of product management, Kim Neuwirth.
“Relying on machines to automate new phases of a process—or an entire process—in partnership with people means that these technologies must be able to explain themselves,” she said.
“AI technologies enhance customer experience and engagement and can do it at a fraction of the time and cost than doing it manually.”
For instance, the United Services Automobile Association (USAA) is using advanced NLG technology to augment human intelligence at its call center—providing greater visibility into employee performance in order to provide better service for members.
By applying AI technology to its call center performance data, USAA is left with “consumable, natural language insights and recommendations for improvement, personalized to each employee,” said Neuwirth.
Beyond the data
According to Neuwirth, the real value of AI technology in BFSI is the ability to “tame the ever-growing data tsunami” in order to better inform people so they can take action. “Today, AI and NLG technology provides essential decision-making data to consumers so they can make the best choices,” she said.
Theodora Lau, director of market innovation at AARP, adds that, while technology is now all-too-capable of understanding spending patterns, users increasingly want the tools to provide actionable insights.
“It is important that the data be synthesized to show us not only how much we spend on avocado toasts or latte via pretty pie charts, but to help us make smarter choices with regards to money. In other words, we expect these tools to provide us with both insights and actions,” she said.
The future of AI and automation in BFSI is full of promise. The bottom line, however, goes well beyond the bottom line—it’s about empowering customers and employees to work smarter, make better decisions and have the freedom to focus on what matters most, said Neuwirth.
“By automating trivial and time-consuming data analysis tasks, we are giving time back to each employee that can be redirected towards higher value work while still delivering an enhanced customer experience,” she said.
For this reason, these technologies hold great potential in just about every aspect of banking, finance and insurance—from retirement planning to financial management, and even anticipating your spending needs before you do.
For now, what it boils down to is more time and more money, and perhaps eventually complete freedom altogether, said Neuwirth.
“The technology is not actually making the decision for the consumer—AI could potentially do this down the road, but it’ll have to clear more regulation hurdles first.”
Want more on the future of AI in BFSI? Download your free copy of our industry report today: Banking on AI in BFSI