Will Artificial Intelligence Make Banking More Human?
Machine learning and artificial intelligence will bring efficiencies to the financial services, but can they also bring more meaningful interactions for customers?
Written by: Leigh Bryant
It’s a strange idea to roll around in your mind: that two things we tend to think of as cold or robotic — artificial intelligence and finance — can possibly combine in any way to make the experience of them more human. It seems unfathomable. But it’s a compelling idea all the same. And it’s being championed by industry insiders, including Myplanet advisor Carrie Russell whom we spoke with about the ways AI and emerging technologies will reshape the financial sector as we know it.
“We’re really moving from this mass market, broadband appeal to customers in the banking and financial services realm to being able to deliver in-the-moment, relevant, contextualized experiences and recommendations that are fine-tuned for them,” says Russell. One size fits all banking has been losing ground for well over a decade, but AI may finally sound its death knell.
AI, as we have all come to know in the last few years, offers incredible opportunities for improving our understanding of audiences and sectors based on the gathering and assessing of massive tracts of data. And while that can sound impersonal, it actually invites an experience quite the opposite according to Russell.
“Banking will have to extend beyond the traditional walls of the bank if it is to meet the expectation of the customer over time,” she notes. As consumers grow more savvy and more demanding in their expectations of the institutions they trust, banks will necessarily need to get smarter about everything from asset management to personal advice.
And one surefire way to grow that trust is through the use of AI.
(That too, may sound counter-intuitive. Few things have as much ink spilled about them as the concerns around AI and data collection and when it comes to finances, surely those concerns are amplified.)
A carefully implemented AI strategy can serve to offer customers better outcomes that will, in the long run, prove banks to be the reliable and trusted partners they were vaunted as for the last century or more.
They’ll do it by making meaning of data. Banks will get exponentially better at things like risk mitigation and personal finance recommendations by parsing and analysing huge amounts of data that til now has been largely misunderstood or entirely unseen.
No longer will consumers have to rely on the gut feel or even careful study of one or two individuals. There will be quantities of data far beyond human ability to analyze that go into financial decision making, meaning products and services financial institutions offer will be more stable, more predictable, and better matched to customers.
And while AI might sound daunting to some when it comes to financial interactions, it’s important to recall, as Russell does, that “digital technologies of all kinds are already reshaping the way that banks interact with their customers.”
Not long ago taking a picture of a cheque and uploading it to your account seemed like a wild (and wildly insecure) way to bank. Now it’s a fairly standard service offered by most financial institutions to simplify and speed up the deposit process, trusted by millions of consumers every day.
“I see technology as an enabler, not as a target,” says Russell. “Technologies always have to be in service of consumer strategies or business strategies.” And AI is ready to be the next technology to serve us all.
Efficiencies and Gains
AI as a part of the changing banking technology landscape is an interesting transformation to consider. “I think it’s a continuum,” says Russell. “We’re at the skinny edge of the wedge today and what we need to do is get right those really basic, routine, regular transactions. We need to tackle those first order problems, because that’s where people are most interested in being helped.”
If an AI strategy is to succeed in the financial sector, the “low-hanging fruit” is the best place to start. Make it easy for consumers to pull up transaction records, track expenses, deal with the day-to-day minutiae of managing finances for an individual or a business and we’ll begin to see massive improvements to the experience of banking over all.
Often we dismiss the low-hanging fruit as too basic or not transformative enough. But when we do that, especially in the financial sector where people have long felt plagued by inefficiencies and bureaucratic bloat, we fail to recognize how much of a game-changer finessing the most frustrating parts of daily banking can be — and just how huge the dividends can be down the line.
By bringing efficiency to more routine parts of banking, we’ll see early and immediate gains for both consumers and the banks themselves that will inform some of the bigger, tougher-to-tackle challenges in the future, giving all parties the confidence to pursue more sweeping and impactful changes.
Of course, it’ll be a tricky transition to navigate. Part of what made banks such hallowed institutions was an implicit trust in a system few people understood well. But the past 20 years have shifted our understanding of banking (and big businesses in general), and the reality is that consumers are no longer content to trust in big, monolithic entities the way they once were.
A certain amount of transparency and openness is going to be expected. Not a public sharing of private information, of course, but a certain amount of openness around how data is gathered and selected and analysed; around who the partners are outside the financial institution that support those systems; and around how those insights are applied to decisions that impact consumers. Consumers are better informed than ever before and will demand more clarity from their financiers as well.
Not only that, but to make best use of AI and other new technologies, a certain amount of openness will be required. Partners and systems need to have a minimum amount of information sharing across departments and organizations in order to succeed in what they aim to do.
The Human Factor
As we grow more reliant on technology, it will also become more important to consider the times when human interaction is required. As stated at the outset, banking can’t be a one-size-fits-all system anymore. Which means no matter how efficient and effective AI-powered technology solutions are, there will still be countless moments requiring human intervention.
“I think that’s kind of the way of the future,” says Russell. “How do we blend technology to make us do the routine in a more efficient and effective way while ensuring that humans get access to humans in those moments that are really important to them.”
Nothing will replace the human touch. Which is why a system that offers efficiencies and streamlines services through AI-powered technology solutions is going to be so important to bringing a bit more humanity to the process. When other, more by rote needs are covered, financial institutions will be able to prioritize the human element.
According to Russell, “It will demand a new generation of banker. I think there will be a new set of attributes that we look for and I think it will have a lot to do with how de we test and learn?” Understanding people on a more human level, instead of just as numbers and stats, means getting the technology at our disposal to do the stats work, so the humans can offer the human touch.
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