Artificial Intelligence has been at the forefront when it comes to building a system that can analyse data intelligently, possess self-learning algorithms and provide a forecast with higher accuracy. From our smart phones to desktop computers, the AI technology has silently made its way into our lives. These come in many forms like speech bot, chatbot, email bot and social media bot. From individuals asking Siri to help navigate to the desired destination, to ecommerce giants offering product recommendations based on the consumer interest, these smart systems are selflessly making our lives easier day by day.
The Banking, Financial Institutions and the Insurance sectors are one of the keen adopters of this technology due to the various business benefits it has to offer. Below are the 4 ways how the BFSI sector is making itself future-ready by implementing artificially intelligent bots.
TRUST THROUGH PERSONALIZATION
Trust is the foundation of any financial business and it needs to be robust and sustainable. While most of the Banks and Financial institutions understand this, there is a large disparity when it comes to servicing their customers. While it is understandably difficult to create a one-on-one interaction environment with a 6-digit huge customer base, a ‘Send To All’ template is not a practical thing to maintain trust.
AI comes to the rescue by implementing personalization at scale which contributes to the overall customer experience of existing clients and prospects. For example, if a customer who is in the process of creating a bank account suddenly exists the page, the smart AI based solution gets an alert and triggers an action. Depending on the algorithms, the bot can either send a personalized follow-up email to the customer to fix an appointment or forward the details to the nearest branch for further actions. This ensures your Leads are not going unattended!
REDUCTION IN COST
Automation has proven to reduce the operational and transactional cost by diverting the traffic from the physical offices to the virtual ones and eventually on customer’s fingertips. This transition not only saves cost to company, but also allows the customers to reach you from their convenient location.
For branchless institutions such as those running the business through mobile apps, AI becomes a critical part of the strategy. The bot’s role here is to automate the customer facing services such as transactions and payment settlement, account creation, risk assessments, etc. This contributes to the reduction in operational costs. For example, creating an algorithm to substitute the traditional methods of processing foreign currencies to maximize profits in trade. This helps in reducing the overall transaction cost by eliminating a large amount of low value and high unit trade cost.
If horror movies do not scare you, IBM’s 2014 report on cyber security intelligence will. It states that 95% of the cyber crimes are a direct result of human error. According to a recent Accenture study, the average cost of breach in 2017 had increased by 23% from the previous year.
These human errors, something as simple as system misconfiguration, poor patch management and the most common of them all “Double Clicking” malicious files and unsafe links has given rise to the need of intelligent systems. An adaptive cyber security platform combines the machine learning tools with human security analysts to track any misconducts arising in the processes. The AI based platform reads through the various transaction logs and flags any suspicious activities. With time, these algorithms get better at detecting threats.
ANALYSING CUSTOMER BEHAVIOUR
In the Insurance business AI has done wonders when it comes to handling complex challenges in the areas of underwriting, claims handling and fraud detection. Insurers are constantly on a lookout for data that can help them better understand customer behaviour to separate high-risk individuals from the low-risk ones. AI does exactly that and makes it easier for the insurance companies to charge higher premium to the high-risk customers and lower premium to the others and thereby reduce price on an average.
An auto insurance company in UK offers lower rates to drivers if they allow a device to be attached to their car that collects data on driving habits. As more and more data is gathered, AI then analyses the same and predicts risky behaviour with better accuracy and hence, target the right individuals.
Financial institutions are generating millions of datasets every day. Hence, intelligent systems with deep machine learning that can train itself to be its own better version is the need of the hour. With the amount of time and resources that is invested into making a cognitively intelligent system, AI is on its way of becoming an industry in itself.