In the beginning, AI eased onto the scene, but now it is everywhere you look – and people love it. In fact, a recent Oracle study found that a majority of people trust automation most. 67% of the 9,000 respondents across 14 countries claim they trust robots more than humans for managing their money.
This shift in the consumer mindset from high touch to high tech signals a shift that financial institutions must also make. Bank and credit union leaders must go back to the drawing board and adjust their technology offerings to give consumers an intuitive seamless experience that promotes strong digital engagement and loyalty.
What caused this shift?
It’s hard to pinpoint the exact point where consumers shifted their trust toward AI, but a key factor could be that use of AI to personalize and enhance customer journey is no longer a new concept. AI and machine learning are part of our everyday lives now – many times without us even knowing it. For example, when shopping online, consumers often see recommendations based on recent searches and purchases. This is powered by AI in order to easily make the shopping more personalized for each individual shopper. Since AI has comfortably settled into our everyday lives, people have now come to expect great product experiences in all walks of life, including banking.
It’s easy to trust something when we’ve seen it works and how it can make our lives easier. Take a function like machine learning-powered autofill, for example. This type of AI, that is based on user behavioral signals, knows what you need to fill in and does it for you.
Because of how common AI is today, we know that it not only brings benefits to consumers, but to businesses, too. From lending decisioning to personal finance management to fraud detection, we know it works and we trust those positive results.
AI works so well in financial services because it can handle incredibly large amounts of data across multiple systems.
Doing this helps the AI to “know” an individual user and then predict their needs and behaviors. Simply put, AI can analyze data from varied sources to get a more complete view of a user, so the recommendations and answers it gives are more personalized than what a human would be able to provide.
In the area of fraud detection, AI can analyze multiple fraud signals in real-time and stop fraud from happening while keeping the experience completely frictionless for the authentic users. As fraud continues to evolve, AI can also detect previously unknown fraud patterns. Consumers look to their financial institution to manage and move their money safely and AI enables them to do a better job at this than one person – or even a team of people – ever could.
What should FIs do?
Banks and credit unions must acknowledge that AI and machine learning are no longer optional, but rather they are a requirement to retain current customers and attract new ones. People want to know their financial institution is doing the very best for them and using solutions like AI is one way to demonstrate that the FI truly wants the best experience for each individual.
AI empowers the FI to provide better service and a better experience. . . This technology helps banks and credit unions provide great customer experiences without additional costs or the need for additional staff. Finally, AI and machine learning solutions enable the average bank or credit union to compete against megabanks through advanced digital capabilities and highly personalized service.
Although AI once seemed intimidating, consumers and businesses alike have come to trust it because of the value it provides. As the Oracle study indicated, AI is here and now it is up to FIs to follow suit.
Kavita Singh
Kavita Singh is Vice President of AI Product Management at Payrailz, where she uses her extensive background in financial services product management and artificial intelligence to further build out and develop Payrailz’ AI product initiatives and features, such as Payrailz’ Action Insights, which are AI-driven financial recommendations that FIs can serve to users based on their specific payment habits. She is also responsible for further advancing the company’s strategic “smarter payments vision” and oversees the go-to-market approaches for Payrailz’ AI initiatives and experiences. She has previously served in product roles at Dun & Bradstreet, Fiserv and Credit2B (a division of Billtrust).