John da Gama-Rose, Head of Banking & Financial Services at Cognizant
Enterprise generative AI is revolutionising the finance industry. By 2026, over 100 million humans will engage with generative AI for their enterprise work, and organisations that operationalise AI transparency, trust and security will achieve a 50% improvement in terms of adoption, business goals realisation and user acceptance.
Likewise, the financial opportunity for businesses in the industry is huge, with Goldman Sachs predicting it could generate between approximately $31 billion to almost $40 billion through a combination of annual cost savings and new revenue opportunities by 2025. However, it is vital firms understand what the biggest opportunities and trends are that are driving AI adoption within the sector right now if they are to make the most of this new technology.
Customer and employee experience
Over the next 12 to 24 months generative AI will drastically improve how customers interact with financial services providers. With 47% of Gen Z stating they will walk away from a brand after a single bad customer experience, AI enablement of digital channels will be crucial for firms looking to attract and retain younger customers.
AI augmented virtual assistants and chatbots will provide firms with a deeper, more nuanced view of the customer journey. For example, by analysing text-based and speech-based interactions, chatbots can be used to help customers move money from one account to another, or signpost to areas of the website that enable the customer to achieve their end goal. Combined with discovery of new data, the result will enable faster detection of issues, and subsequently a quicker resolve time by augmenting decisions.
AI will also help companies to improve employee engagement, and by doing so increase staff commitment and retention. For example, companies have seen turnover rates of 45% in customer service departments due to the high stress nature of the role. By augmenting workers with AI these agents will be able to give better, more impactful recommendations to customers and, as a result, be more satisfied and motivated.
Personalised banking
Customers are increasingly looking for products that are more aligned with their priorities and lifestyle. For example, some studies indicate 66% of consumers expect companies to understand their unique needs and expectations, and 52% expect all offers to be personalised. Generative AI will enable firms to offer more personalised financial products. More specifically, by providing drastic improvements in contextualising customer and company data, actionable insights will be discovered and actioned more quickly.
By automating the time-consuming processes of discovery, both generative and narrow AI technology will help reduce the time required to review loan applications, helping people gain access to money significantly quicker than ever before. It will also reduce friction around verifying loan documents and customer identification, enabling workers to focus on more value-add tasks while improving the customer experience and reducing cost.
Fraud detection and regulatory compliance
It is estimated that fraud leads to a loss of $4.1 trillion annually. Given the magnitude of this threat, firms are constantly looking for ways to identify fraudulent actions as soon as possible.
Simultaneously, firms also face multiple regulatory requirements, both within and across countries. The operational costs associated with keeping pace of implementation and enforcement of policies have been growing steadily for the past several years, with it estimated that the cost of compliance for banks is $10,000 per employee.
Consequently, firms will use generative AI to augment current fraud and compliance tools and techniques by using its strengths in the areas of anomaly detection (e.g., identification of suspicious activity or gaps between new policies and current policy implementations) and ‘explainability’ (e.g. generating documentation needed for audit trails).
Finally, as employees are required to undergo regular training, firms will also use it to generate materials for compliance training.
Social listening
Firms are looking for new ways to monitor, analyse and engage with content generated from social media channels, blogs, and other relevant online sources. Generative AI will turbocharge this process as businesses are able to determine the drivers, tone, and implications of online conversations more accurately.
This process will also help firms potentially uncover emerging trends and market needs across their customer base as the technology explores the relationships between a much broader set of variables than what has been previously used to assess customer needs.
2024 will be the year of generative AI impact
2023 was the year generative AI went more mainstream, 2024 is set to be the year where financial businesses begin to see real value from the technology. By understanding these key areas where generative AI can drive return on investment will help firms prioritise and build for success over the coming 12 months.
