As a bank, one of the most valuable assets you have at your disposal is customer data. Tap into that data, and you can create better customer experiences, improve loyalty, and unlock massive cost savings. In fact, banks that use their data wisely (and safely) stand to save a combined $447 billion by 2023. Simply put, data is a primary driving force behind massive innovations that stand to completely transform the banking industry going forward.
Of course, the key to reaping the many benefits of data lies in artificial intelligence. Today, a growing array of AI applications are being developed that span the front, middle, and back office. Collectively, they take advantage of customer data to create greater efficiencies, increase security, and deliver more satisfying customer interactions. For these and other reasons, AI is being widely adopted across the banking industry. In fact, according to a study by PricewaterhouseCooper, 52 percent of financial services executives are already making substantial investments in AI applications.
Among the ways they hope to transform their businesses using AI include:
Enabling better customer service. A growing number of banks are using AI to power chatbots and even humanoid robots. HSBC, for example, made headlines last year after it introduced Pepper, a banking assistant robot designed to help customers get the information they need at retail locations. Other customer service related applications of AI include smoothing out the customer identification and authentication process and automating the delivery of personalized insights and recommendations. Collectively, these and other enhancements make banking a faster and more efficient experience, while also more tailored to their individual needs.
Increasing revenue. There are a variety of ways in which banks can use AI to increase their revenue. For example, they can use it to conduct revenue attribution, thus allowing them to offer the appropriate services and solutions for individual customers, while boosting uptake in the process. Similarly, AI is very well suited to recommending new services and up-selling to existing customers. And for those banks that offer insurance, AI provides another valuable opportunity by allowing them to optimize pricing, claims triage, and claims forecasting.
Lowering risk. Two of the biggest areas where AI is delivering early successes in banking are fraud detection and cyber security. Given the fact the cases of fraud, whether bad check writing, fraudulent ATM use, or otherwise, is rampant, and that the average financial services institution in the United States is attacked approximately 30 times per second, this work is critical. In both cases, the key is to success is using machine learning systems to identify anomalies in customer data that would otherwise go undetected.
Driving greater retention. Two other critically important applications of AI in banking are promoting customer retention and amplifying conversions. AI can be used to combat churn by identifying customers who are at risk of leaving and automatically responding with an incentive designed to help them rediscover value and stay. Meanwhile, those customers who are on the fence about adopting new products and solutions, but can likely be incentivized to do so, can automatically be targeted with special offers to help get them over the line.
AI has already begun transforming the face of banking, and that trend is only going to become more pronounced in the months and years to come. For anyone in the industry, adopting AI is critical for unlocking the value hidden in customer data. Those who do so successfully will differentiate themselves, endear themselves to their customers, and make a dramatic positive impact on their bottom line. Those who don’t will be left behind.
If you’d like to find out how we help businesses safely leverage consumer data to create compelling experiences, or you’re just curious to learn more about how banks are operationalizing AI, let’s chat!
To gain deeper insights into how AI is enabling banks to better anticipate customer needs and improve business outcomes, check out our latest chat with Peter Wannemacher, Forrester’s principal analyst.