by John Vladimir Slamecka
Artificial intelligence is everywhere. From business innovations and media headlines to TV and movies. In the financial services industry it’s still in its early stages however the organizations are slowly catching up. Banks are navigating how they can build and implement AI that capitalizes on the skill sets available and addresses the highest-priority challenges and opportunities for the industry. The added bonus – it’s expected to save companies big bucks.
Where AI is Creeping in
Some large financial institutions, including commercial banks, insurance and wealth management companies, have started using AI or partnered with AI startups. Erica, Bank of America’s AI powered virtual assistant, uses voice commands and texting to help customers with basic tasks like looking up account information or transferring money.
It’s not just about customer facing technology. AI is being tested for middle and back office tasks too. By using machine learning to analyze big data sets, AI is helping companies:
- Monitor for online fraudulent activities in real-time
- Make faster and more informed lending decisions on customer loans
- Reduce the time is takes to complete compliance and regulatory tasks
Key Considerations for Implementing AI
Just as with any big operational change, AI needs a careful implementation plan to be truly effective. As banks and credit unions adopt this powerful technology, there are 4 steps to consider.
- Build a fast, secure digital backbone
To function correctly and deliver value, AI needs access to large amounts of quality data that it can collect, analyze, and make decisions upon. The data needs a highly secure, low latency connection to quickly travel from point of capture to point of analysis and then back again.To achieve this a cloud infrastructure is recommended. Having a strong digital backbone and appropriate infrastructure in place will help financial institutions future-proof their AI technology investments.
- Re-skill the workforce for AI
In the near future, employees and AI will work together to solve problems. While some current jobs will be taken over by AI, more jobs will be created for AI and employee collaboration. Workforces should adapt to this by re-skilling talent and reorganizing teams. According to Accenture, banking executives say only 1 in 4 employees are ready to work with intelligent technologies. Companies can start by planning how they will use AI, researching the skills needed to work with the technology and building an employee training plan.
- Follow privacy and security requirements
Respecting the privacy of customer data while maintaining high security standards is critical. AI uses a large amount of customer data to ‘learn’ and perform tasks. This can make tracing its progress and how it uses customer data complex. Plus, laws such as the General Data Protection Regulation (GDPR) and Payment Services Directive (PSD2) require companies to be more transparent with customer data. These emerging factors combined with the highly regulated finance industry means extra care is needed when adopting AI. It’s also vital to regularly update governance policies to help reduce and control any potential risks.
- Stay connected with customers
From predicting future issues to personalizing recommendations, AI is helping to improve customer services. Additionally, AI is being used to resolve simple issues quickly and efficiently. This frees up customer service representatives to help with more complicated questions or tasks. It is important to balance using AI with human employees. Although AI can ‘learn’ like humans, it still lacks emotional intelligence and empathy. To make sure businesses are staying in touch with customers there should be regular touchpoints and customer service surveys to ensure the AI is providing a benefit, not a hindrance.
The Staying Power of AI
AI will play an increasingly important role within the banking industry as the rewards outweigh the risks. It presents the potential to help financial services organizations save time and money by becoming more efficient. This presents the opportunity to provide more personalized, omnichannel services for their customers and members.
To succeed, financial services organizations need a fast and secure digital backbone to manage the data and computing needs of AI. It is important to complement this with re-skilling the workforce to fully understand its benefits. Finally, no business should lose sight of ensuring the right security measures are in place, privacy and compliance standards are adhered to, and the human factor is never entirely lost. By remembering these factors and developing a thorough implementation plan, the financial services industry can help humans and AI work together harmoniously.