Financial institutions willing to embrace technical innovation will reap significant gains
Innovations in artificial intelligence -- with their efficiency creating capabilities -- are becoming more and more mainstream and corporations rapidly take advantage of potential, transformational benefits. It’s no different in financial services. Financial institutions willing to explore and implement these capabilities open the door to many operational, strategic, and customer-focused enablers. Those not willing to make the journey could face the struggle of procedures and styles that become antiquated and cumbersome in the future. Gartner® says businesses that use AI to “remake the customer experience will drive the payoff for digital initiatives through 2025.”
Here are some of the ways banks can and should be looking to leverage AI:
Internal View: Operational Efficiencies
Bank employees currently spend countless hours processing documents such as closing agreements, contracts, statements, and insurance claims. One of the most exciting promises of AI is the ability to take labor-intensive and repetitive tasks away from employees and provide an automated solution. This will drive internal efficiencies, improve accuracy, faster processing, and - importantly - will free up valuable working cycles for these employees to focus on more complex issues and projects.
Various estimates predict the speed and efficiency gained will add $1 trillion - or more - in value for the financial services industry overall by 2030. While there are concerns about the impact on jobs, Gartner says by 2020, AI will become a positive net job creator. Employees will be able to focus more on strategic initiatives and areas that generate more value for customers and the business.
When it comes to spotting potential criminal activity, AI brings a broader capability to evaluate trends, patterns, and anomalies across wider sets of variables, larger datasets, and things that are just not always transparent to one human reviewer or risk employee. For example, retailers typically lose nearly 2% of revenue to fraudulent claims and false credit card declines. Recently, Mastercard®said it cut false declines by 80 percent using AI.
Today’s customers expect an “omnichannel” experience. They want to be able to check balances, make transfers, purchases, and trades using their smartphone, tablet, or laptop. To them, it should be the same experience as sitting down in person with their broker, banker, or teller. They want a consistent experience across all channels. For example, a recent PWC®survey found 41 percent of customers expect to get financial advice from an AI assistant in the next five years.
Monetization of Existing Assets
Some of the analytic capabilities created by the implementation of AI give institutions new-found opportunities to leverage the tremendous amount of data they already possess on their corporate and commercial customers - including valuable insight for global risk and compliance, marketing, and sales. The power of data analytics creates incredible value to the customer and profitable monetization opportunities for the banks. PWC estimates that the revenue from monetizing data could potentially be as high as $300 billion annually beginning 2019.
Seize the Day
Implementation of AI capabilities and technologies enable financial institutions to make certain existing processes and procedures more efficient. It is an enabler of innovation and technology that will drive exciting new opportunities for the industry.
Interested in learning more about how AI can help your bank innovate? Check out this video about the Self Healing Branch™.
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