In recent days, financial services are changing faster than most people, especially the layman, can anticipate. The rise of Artificial Intelligent (AI) technology in this decade is changing the tide of the financial industry, especially in banking.
Before, AI was mainly used by social media platforms as a means to keep users engaged. However, recently, giants like Facebook and Google have started providing more chatbot services as compared to the banking industry, even though the latter have far richer personal data than the former.
This phenomenon has come about due to various factors, including the financial industry’s inability to meet customer expectations, monetary regulations, and the cautiousness towards implementing new technology. Recently, banks are becoming well-aware of the fact that using AI outweighs the risks and that there is a need to raise their engagement of customers through many other ways other than the traditional phone call or face-to-face meetings.
Utilizing AI in Banking Systems
1. Financial Engagement, Advice, and Recommendations
This segment is going through a major change, where the application of AI in the system can give banks access to more of their customers’ financial information. To top it off, it can improve further with forecasting future customer expenditure, using customers’ personal information. This will help customers to control their budget and make better financial planning. Resulting in more personal financial engagement between banks and customers.
An additional area of potential is for banks to provide recommendations based on the personal data of each customer. Banks can become a great life partner by developing personal relationships with customers. Preventing the apathy of customers towards banks and encouraging them to continue using financial services.
Also read: “The Digital Revolution of Insurance in Indonesia“
Financial advice is one area where banks with AI-integrated systems will benefit the most. AI can give advisory solutions to customers’ financial matters. Cutting the time to answer all of those questions, giving customers more satisfaction. Banks cannot afford to lose out to Google, Facebook, or even customer-to-customer models of business. Like Amazon, because they are moving incredibly fast in using technology to polish their services.
Customers are more likely to trust them more than banks and they are already moving forward further than banks. This can be applied to mobile banking where AI-enabled programmes and chatbots are capable of mimicking human conversations to a certain degree and may become a personal finance manager. For everyone, from anywhere, anytime, in various languages.
AI may be a dream come true for advertisers since customers’ behavior can be accessed and matched to what they need and prefer. With this technology, banks can provide tailored advertising that is unique to every customer, giving them a more personalized experience.
3. Security & Fraud Detection
As discussed before, one of the reasons why banks are not as fast as Facebook or Google. In harnessing personal data to provide better engagement is due to cautious behavior towards new technology. A wrong step can lead to leaks of personal data to unwanted third party and this will create chaos.
AI is not a brand new system to the financial industry. But customers probably know AI for being used as a means of fraud detection. For example, if there is a transaction above a certain value or if there is irregular activity in the account.
While this may provide better security, some customers some may find this annoying. It wouldn’t be a problem if it calls it right, but when the bank system misunderstood a safe transaction and even blocked it. then the safety that they want to provide is not really there.
However, with the improvement of AI, this method can be enhanced and fortified to be less annoying while still maintaining security. It can raise the accuracy to detect frauds reducing the possibility to processed the wrong calls. and if it somehow still processed it. The AI or chatbots can still provide a simple measure to clear it back.
On the other hand, as advanced as AI is, bank industries must still provide a measure for customers to feel a sense of security. Just like how they need to build trust between bank branches and customers. Interestingly, research shows that customers are prepared to trade security for convenience.
As in this highly convenient-dependent era, people demand something to be more handy and simple. They tend to compare between financial institutions on services which are convenient. However, once they feel that there is a threat to their security. They will drop all the convenience for the safety of their data. It is one of the reasons why people are still cautious of interacting with financial institutions on the Internet right now.
However, we at Qiscus are ready to take that challenge. We can provide a technology that still maintains security but does not forsake convenience for the customer’s sake. You can develop your businesses further by collaborating with us to reach a new height in customer engagement. Drop us a note at www.qiscus.com or you can read our white paper and see what we can offer for you. We can help you find the best solutions for your business.