Robot bankers, tailored services and cost savings

February 2021

The use of artificial intelligence and machine learning in banking and other financial services is not new. However, one clear result of the past year’s turbulence is that these technologies will become an even more common part of the banking world. In fact, because of the anti-pandemic measures, the demands on digital customer service and by extension, the modern technologies that operate these technologies have increased even further.

 

Artificial intelligence and machine learning technologies are now widely used in many areas of the banking industry. They help detect hacking attacks and financial fraud, establish client credit ratings, select targeted products for individual clients, and, through self-learning chatbots, often handle communication with the clients themselves. But with this increased demand for fully digitized services, banks will need to adapt these technologies even faster and integrate them even more deeply.

Now, more than ever, clients expect their bank to communicate with them fully digitally, with real-time responses, and to allow them to handle the majority of their banking needs directly in mobile or online banking – without having to visit a branch or contact bank employees.

While the current situation is not fundamentally changing banks, it has significantly accelerated long-term trends in the industry. Not only do they now need significantly fewer staff in branches, but in a very short period of time they have also had to fundamentally overhaul their approach to clients – with a much greater emphasis on digital channels and full self-service access.

“The coronavirus pandemic has significantly accelerated the digitisation of banking. But it has also shown that it is not enough just to digitize a selection of the most common activities. Banks currently have to offer a truly complete digital customer service experience. The first step is to acquire the client digitally, in a way that does not annoy or discourage the client and requires as little time and effort as possible on their part. At the same time, the bank must digitize the entire process, including operations on its own side. Current technologies will allow processes not only to be automated and accelerated, but also to increase accuracy, for example when choosing the right offer for the client or when determining credit risk,” explains Karel Beran, head of products and innovation at BSC, which has been involved in the digital transformation of banking for 30 years.

 

The power of artificial intelligence

When it comes to comfortable customer service, banks can entrust a variety of processes to advanced technologies, achieving not only higher productivity but also higher response speeds to client requests along with lower error rates. Common, repetitive queries or service tasks can be handled by so-called chatbots (computer programs that communicate independently with clients) using artificial intelligence technologies, in conjunction with programs for robotic process automation.

The combination of big data analysis and artificial intelligence also makes it possible to deploy a more personalized approach to clients on a larger scale. Indeed, based on advanced data analysis, everyone can be offered genuinely relevant financial products and services that respond to the client’s life situation and specific needs. Personalizing client communication and the products on offer is an essential option to avoid “depersonalizing” the client’s relationship with the bank, a problem that the bank’s transition to a digital environment can bring if the bank does not get the digitization process right.

“Banks have a huge amount of client data that they use to a minimal extent. Based on this data and on real-time responses to client behaviour, banks should be able to recognise the living situation and needs of each client and offer the right product or service on the right channel at the right time. And if a client shows interest in a product or service, the bank should be able to handle the entire request online,” Karel Beran describes.

 

Robot Banker

Competition in the financial products market is significant and the advantage will go to banks that can quickly roll out new services, serve their clients through the channels preferred by their customers, while keeping costs low and efficiency high. Clients can now be managed by a robot that not only works nonstop and at a lower cost, but also achieves better results thanks to better algorithms, higher speed, increased data access, and the absence of emotion.

 

Deploying artificial intelligence brings both savings and business successes for banks. Thanks to AI, customer service can be largely automated while offering targeted products and services that they will be interested in.  “Experience shows that campaign personalization helps increase the success of new client acquisitions by up to 10% and digital channel sales by up to 30%,”concludes Karel Beran.

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