For most financial brands, Artificial Intelligence, Machine Learning, and Cognitive Banking are still concepts and buzz words that we hear at a conference or read in an industry-related article (not like this one you’re currently reading) that leaves you more intimidated than empowered. When it comes to Artificial Intelligence, the use cases and adoption rate for financial brands run the gamut. From your large national FIs, and fintech’s to community banks and credit unions, there are varying degrees and experience in the use of AI. One thing we do know is that leadership teams are feeling more confused than curious and the fact that we marketers, technologists, and innovative thinkers tend to, unfortunately, overcomplicate and intimidate around these concepts, we end up hindering creative and collaborative conversations around improving the customer experience and get paralysis around the technology.
So if your bank or credit union thinks about Artificial Intelligence, and your palms start to clam up, or your head feels like it is swirling with a million thoughts, excuses, and question marks. You aren’t alone.
But, I am here to tell you that there is a path forward. And it’s one that makes sense for financial services.
Let me break it down for you with some simple definitions, followed by data that explains why AI is important. Then I’ll end it with how the use of technology is currently, or will eventually, help your financial brand.
What is Artificial Intelligence (AI)?
Artificial Intelligence is:
- the theory and development of computer systems able to perform tasks that normally require human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages.
In a nutshell, this means that technology can act like a human and, quite frankly, process, analyze, and learn from data far more efficiently and accurately – plus scale at a rate not possible for humans. Additionally, AI can learn, understand behavior patterns, get more intelligent and more sophisticated over time, and adapt according to human preferences- this is how digital marketing becomes so powerful.
For example, AI has made it possible for mobile check deposits. Don’t you remember when you were building your business case for implementing mobile deposit, and your Chief Risk Management Officer almost fell off her chair with the sheer thought of the amount of fraud that was going to occur? Enter AI and it makes check processing practical and safe, predicting, and deciphering handwriting and potential fraud.
According to Business Insider, 80% of banks are highly aware of AI’s potential benefits. By 2023, the aggregate potential cost savings for banks from AI applications is estimated at $447B. Now, your CEO might not be a tech guru, but he/ she speaks numbers and has two key metrics they pay attention to-
- Efficiency Ratio
- Net Income
This is where you start your conversation.
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How can financial brands use AI?
With the Customer Experience being a top priority for financial brands, listed as the second greatest concern among banking executives, using AI can allow for streamlined interactions with your customers, consistent and relevant conversations and offers, and overall increased sales opportunities through behavioral analysis and the use of conversational AI.
For example, with the increased amount of digital interaction and a growing consumer segment that don’t use brick-and-mortar banks (40% of millennials), providing AI-enabled chatbots and voice assistants are becoming essential touchpoints in the CX journey. Keep in mind that AI doesn’t replace the banker of choice. But combining AI-powered technology with human elements can provide quick, efficient, and cost-effective service while providing the opportunity to reinvest in training and resources to build deeper technical skillsets and service expertise for your team.
Additionally, with increasing regulatory burdens for financial brands and the associated expense related to compliance, audit and loan processing, and documentation, brands can create a fully seamless loan approval process with AI. Using AI and data, financial brands can make smarter, data-driven decisions, and eliminate cumbersome, manual processes for data collection, reducing human error with documentation (you know the dings we get on audits).
AI isn’t robots eliminating jobs but rather allowing brands to invest in tools and technology that makes manual and labor-intensive elements of the job more efficient. This provides staff the opportunity to increase productivity for more meaningful and impactful functions of the job.
I recently read a quote, by Matthew Upchurch, CEO of Virtuoso that sums it up perfectly: “We need to automate the predictable and humanize the exceptional.” That, in my opinion, is what financial brands should aspire to.
AI and Financial Wellness
While fraud, customer service, and process efficiency are important, the long game here is financial wellness. Financial wellness for our clients, customers, communities, and of course, our children. This is a strategy that is a win, win.
Financial brands have access to their client’s most sensitive data: their financial picture. But with this access to data comes the opportunity to empower our clients through financial tips and insights based on their consumer behavior and spending patterns. Through the use of AI, we can go a step further. We can provide financial brands the ability to provide daily financial digests, with notifications that offer opportunities to develop an individual’s financial prowess and financial effectiveness. This is beyond a text message that lets you know if your account balance is low. With AI, the power is also how personalized you can be in messaging and providing financial guidance.
When we can better understand and analyze our customer data, we can better predict their life stage and financial needs. What is occurring in their lives and affecting them in achieving their financial goals, and we can be proactively providing financial guidance to reduce debt, save for a home, or save for the birth of a first child- even get rid of that pesky subscription service that you haven’t used since college.
The opportunities indeed are endless with AI, but we have to think about how are we making our customer’s and member’s lives remarkable? How can we create opportunities for them to achieve their financial goals? What can we do differently to ensure they’re happy, fulfilled, and prosperous for years to come?
Those are the questions financial brands need to be asking themselves when determining if they should utilize AI as part of their growth strategy, not what technology should we use.