2023 has seen AI take some massive forward bounds. How will this speed up further in financial services in 2024 and what impact can employees expect? How much more so will open banking become more entrenched? Here Angus Panton, Director of Banking and Financial Services at Expleo, explains.
As AI technology becomes more mature, it can provide benefits across the whole value chain: whether customer acquisition, servicing or even launching new products. With the help of AI, financial institutions can harness data and mass customise, offering bespoke services that will suit the needs of their clients. This also opens new opportunities for cross-selling: using AI-generated data, sellers can make informed decisions about the acquisition journey and identify gaps in their offering. They can then focus efforts on upgrading the areas that require more attention and continue to expand on popular products.
This applies both to traditional services and open banking. Established banks and fintechs have clear processes and operations that customers have become accustomed to. Adopting an open banking model means learning new behaviours and getting comfortable with a new environment.
We’ve only scratched the surface of the possibilities that open banking offers. AI enables us to tap into that potential much further. For example, a bank may be able to approve a mortgage application within minutes, making processes more efficient. Beyond processes, AI combined with open banking can address concerns in a timely manner. This helps save costs and enhance the customer experience. By utilising AI in the backrooms, a financial organisation can receive a complete record of the customer relationship and decide on the best course of action based on the unique persona and experience of the customer.
Payment friction
Within the UK, it is evident that financial institutions have made significant progress to reduce friction for payments, allowing customers to make local transactions in no time. Newly established banks have made payments frictionless in very little time, showing that this is a clear priority for the sector.
Where financial organisations, such as banks, need to improve is within the realm of corporate payments for financial institutions. Admittedly, there is a lag within cross-border payments that needs to be addressed by the payment industry and innovators.
Furthermore, whilst the evolution of correspondent-banking relationships have been the trusted intercountry movement of money for the last hundred odd years, movement of money is as much movement of information as it is movement of currency. New standards proposed by financial institutions must allow for a seamless flow of information between the different parties involved within the payment process.
Digital transformation trends
Undoubtedly, embedded finance will have a significant impact on digital transformation in 2024. Embedded finance will grant different organisations that interact with consumers the ability to embed financial services without being a bank.
From a business perspective, financial institutions will want to use AI to service customers. This will help improve customer experience and thus increase wallet share. As a result, businesses will be able to generate more income due to customer retention.
