By Jason O’Brien
Artificial intelligence (AI) is slowly becoming a commonly used term for financial services firms around the globe. The abbreviation – AI – tends to make some people tremble in their boots as they feel we’ll have an apocalyptic situation on our hands where robots take over the world. Aside from the Steven Hawking-esque doomsday predictions, AI’s place within the financial services world is meant to pull together multiple technologies to analyze data, foresee solutions, and make decisions.
Utilizing Data
Financial services firms are collecting more data than ever from their customers. Big data is this century’s currency, similar in value to gold. Similarly, credit unions (CUs) are collecting and sitting on a goldmine of data with questions on the best way to effectively use the information. Using AI, CUs can more quickly discover trends within the data to better serve their members and provide relevant information to make their lives better.
AI to Improve Member Experience
Innovators and early adopters will incorporate AI to improve CU member experience and streamline processes. So, what does this look like? Financial institutions could soon be using AI to interpret transaction data of their members to better understand an account-holder’s spending habits. Doing so better positions CUs to provide their members with a higher level of attentiveness and customization by, perhaps, providing member alerts on spending, offering recommendations to save more, and providing account holders with best practices on how they can improve their financial well-being.
Robo Advisors
Robo-advisors in the wealth management field are beginning to surface, providing automated portfolio management at some financial institutions. The bots analyze a person’s portfolio, risk tolerance, and previous transaction behaviors to help planning and growth. Wealth-management firms are looking to AI to help offer a more tailored experience for their members.
Chat Bots
AI bots are used in many service-related businesses, however early adopters in the financial services sector are applying chat bots with natural language processing (NLP) to quickly connect customers with information. If an NLP bot is unable to accurately answer a member’s inquiry, the question is passed along to a real-life service representative to assist. In some examples, AI can even monitor along and “observe” how the human solves the customer inquiry so it can learn and better serve the next individual.
AI Adoption
A PricewaterhouseCoopers report on the use and potential of AI found that reviewing transactions for compliance was a likely use case for financial services firms. Report conclusions show 16% of top financial services firms surveyed said they are either in the process of widespread adoption or have completed the adoption process of AI. Another 57% of respondents said their firms have not implemented the technology, but have researched and completed one or more proof-of-concept tests.
Integrating AI technology will help financial services firms recognize account holder patterns and has the potential to move institutions from a reactive to proactive member model.
It will be fascinating to see how the industry progresses and adapts to this next evolution of technology to meet member expectations and improve member experience.
Jason O’Brien is SVP/Payments for CUES Supplier member SWBC, San Antonio, Texas. Check out the company’s latest ebook, Meeting Consumer Self-Serve Payment Demand, to learn valuable and timely information on current trends in the payment industry, tips on how to meet regulator and compliance demands, and specific steps your credit union can take to engage with your digital users.