Digital transformation is booming right now. Smartphones are everywhere and because of the ubiquity of technology, consumers have grown to rely on their devices with the expectation of instant communication with a business. As the reliance on mobile devices only grows stronger, artificial intelligence (AI) solutions are beginning to impact consumer preferences for communication with their banks. Likewise, financial institutions are beginning to gravitate to AI technology that enables organizations to meet the new expectations that consumers have when it comes to doing business with their bank.
Meet Consumers Where They Are
According to the financial research firm Autonomous, people are outnumbered three-to-one by their smart computing devices – an estimated 22 billion in total. Furthermore, a recent report by Autonomous found that traditional financial institutions can shave 22% in costs by 2030 by using artificial intelligence technology. Today, the opportunity for banks to evolve their business by using artificial intelligence while simultaneously increasing customer satisfaction is enormous.
Banks are using artificial intelligence technology to accomplish a variety of tasks already today – and all with one common goal in sight: to improve the customer experience and reduce operating costs. Whether the deployment of these AI solutions exist in the front-office (think chatbots), middle-office (think fraud detection) or back-office (think credit underwriting) of a financial institution, banks across the globe are turning to AI to enable them to provide an enhanced experience while also saving the organization money in the long run.
In fact, Forbes states that 51% of companies cite cost reduction as the primary benefit of artificial intelligence technology. And, what’s more, a 2019 study by Juniper Research found that the operational cost savings from using chatbots in banking will reach $7.3 billion globally by 2023 – up from an estimated $209 million in 2019.
Let’s take a closer look at a few key use cases for how banks are utilizing AI technology to help drive down operating costs.
Provide 24/7 Support Without Increased Cost
Perhaps the most common use case of AI in banking today is the deployment of chatbots to front-end customer support communications, also known as conversational banking. Financial services organizations are leveraging chatbot technology to lower costs associated with customer support and extend the hours of service.
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One of the primary benefits of using a chatbot solution is the expanded accessibility for customers to seek self-service. Businesses that utilize a chatbot solution can break free of limited hours of service — which often frustrates consumers and mars the customer experience — due to time and resource constraints. Chatbots provide an ideal solution in helping customers with routine issues like accessing an account balance or confirming an appointment; they can even free up resources within an organization to channel time and energy into more complex and significant matters.
Allow for Focus on More Complex Issues
Financial institutions are using AI, specifically chatbots, to meet the increasing customer expectation for 24/7/365 service. The AI technology behind today’s chatbot solutions have become so advanced that consumers are often unaware that they are interacting with a bot rather than a live human. Many banks today are using chatbots to answer commonly asked questions or help customers solve basic, routine issues. The use case of AI technology as labor-replacement or a shift in labor thereby enabling human resources to focus on greater, more complex tasks, reduces operating costs by way of maximizing the resources an organization already has on payroll.
Reduce Human Error
An additional use case for artificial intelligence in the banking industry today is using such technology to reduce the rate and risk of human errors. As human beings are, of course, completing the daily tasks at hand in financial institutions, human error is always a concern for organizations – these errors often can lead a security breach and subsequent loss of revenue for the organization. Human error is so common, in fact, a 2018 survey by Netwrix lists human error as the leading cause of financial data breaches. It only seems natural that financial organizations would take any measure they could to reduce this risk.
Artificial intelligence can help a financial institution’s agents avoid making a variety of errors: from simple mistakes in following procedures and protocol to errors that can occur when juggling a high volume of customer interactions in a workday. Advancements in artificial intelligence technology today are making it easy for banks to avoid human error in routine tasks. For example, a bank can utilize chatbot technology to handle frequently asked questions coming in through chat on their website. Not only does this reduce the margin for error that exists when a live human agent is fielding chats and answering customer questions, but it also frees up the agent’s time to work on more complex issues at hand.
As financial institutions look for ways to reduce operating costs in the coming years, artificial intelligence solutions will continue to increase as a powerful strategy. By expanding the hours of customer service, reducing human errors and allowing for a greater focus on more complex issues in an organization, banks can lower operating costs by deploying artificial intelligence technology in their contact centers.