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Historically, the financial sector has been slow to adopt new technology. Legacy infrastructure and business models have often stood in the way of innovation, making it hard to offer the experience demanded by today’s consumer.
However, changing attitudes towards digital adoption and a recent influx of tech investment have given traditional financial organisations ripe opportunity to start gaining a competitive advantage in an age of agile disrupters — and certain trends are emerging as a result.
First, the intersection of artificial intelligence (AI) and the Internet of Things (IoT) is introducing significant innovation within finance services. AI assistants like Amazon Alexa and Google Home are widely used in the modern household, and financial firms are increasingly exploring ways to integrate them into services.
Meanwhile, banks are also developing a new generation of first-party AI platforms to improve the services they offer to customers. These new solutions offer various services ranging from helping customers with routine tasks to providing consultation.
AI is at the heart of the trends driving the future of financial services and legacy businesses must embrace it to avoid being left behind.
The convenience of AI-based home banking
AI assistants have found their way into millions of homes, with research from Ampere Analysis suggesting 52% of internet households in the UK an 49% in the US feature a voice assistant. The proliferation of these devices have already prompted major banks like Barclays, Capital One, and Dutch Bank to integrate their services with them.
These technologies offer a new form of convenience unavailable on other devices, with smart speakers enabling users to issue commands to complete a wide range of banking transactions. This includes making payments, foreign-exchange transactions, logging in and out of accounts, or confirming purchases.
By contrast, other devices like smart phones still require touch, face, or other forms of biometric identification for customers to access banking apps and perform transactions manually.
This new level of voice-enabled convenience also advances the cause of digital accessibility, facilitating new avenues for disabled people who struggle with traditional banking methods.
Better serving these customers stands to improve the bottom line, with research from Return on Disability suggesting the global disability economy controls $13 trillion in disposable income.
Providing greater ease of access to myriad users enables banks to improve customer experiences while meeting their acquisition and retention targets.
Securing customer data in an interconnected world
As relatively new technologies, voice assistants can be exploited by cyber hackers, with their reliance on internet connectivity meaning growing collections of data online that could put confidential user information in a vulnerable position.
These devices currently manage voice authentication for accounts in different ways, but financial institutions and third-party companies need to consider the most effective way to standardise security for the use AI assistants to become the norm.
Regardless of the assistant, these measures will need to involve secure connections between the bank and the connected device, while ensuring a user’s voice can’t be recorded or manipulated to compromise their accounts.
Customer service takes an AI leap
Chatbots and other digital assistance features are becoming more common among financial organisations too, equipping users with a range of new functionalities for customer service, providing account information and offering general advice.
For example, Swedish Bank SEB developed Aida, a conversational AI that handles front-end customer service, account queries and consultation bookings. Meanwhile, Bank of America launched its Erica platform, which provides advice on money management, while enabling users to access credit scores, search for past transactions, and more.
In developing their own AI-based solutions, these banks and other financial institutions stand to benefit by offering improved services, regardless of the device used by customers.
Towards intelligent banking
The financial sector is transforming rapidly, with the integration of established AI assistants and emerging first-party AI solutions poised to significantly improve convenience and accessibility for account holders.
However, this greater convenience is accompanied by security challenges which oblige financial organisations to ensure their AI technologies and integrations secure customer data.
As financial organisations seek to harness the potential of AI-based technologies, it’s crucial they partner with technology service providers to keep up with the pace of digital transformation and realise the benefits of AI.
With the right digital strategy, these organisations stand to improve their services, protect customer data, and boost profitability.