The robots are coming! We’ve not quite reached Transformers level yet, but artificial intelligence (AI) has certainly arrived in a big way across the financial sector.
Banks are turning to AI to help create a more personalised digital banking service for their customers and, where possible, using it to reduce costs and reinvent the in-branch experience. By 2027, it’s thought that AI will account for 15% of all private sector jobs, with some banking officials saying that up to half their workforce could be replaced by machines.
So the question remains, is AI the future of banking? And whilst this all sounds very “cool” - is there a human cost to embracing artificial intelligence?
Banks have been experimenting with AI for a while now. For some, it’s simply using chatbots to help improve frontline customer service; for others, like China Construction Bank (CCB) and the Bank of America, it’s opening branches run entirely by robots.
“Woah! What did you say?”
Yes you did read that right - the future is well and truly here!
These branches are 100% automated, with robots helping you with everything from windrawing your cash to giving sophisticated mortgage advice. Small personal assistants use voice recognition software to handle customer queries and facial recognition for increased security. In its current form, the branch set up by CCB can handle up to 90% of cash and non-cash related banking activities.
If you’re starting to get a little freaked out, don’t worry, you’re not the only ones. A recent study by HSBC found that only 7% of people would trust financial advice from robo-advisors, so it seems we still have a long way to go before we start seeing the high streets fill up with robo-branches. But are we already getting our financial advice from AI more than we know?
Whether we want to believe it or not, AI is becoming part of our everyday lives. We are now more open to the idea of computers assisting us than ever before, so why not with our banking?
It turns out that whilst traditional banks experiment with enhancing their in-branch service, challenger banks such as Tandem are turning to behind-the-scenes AI solutions to create more personalised banking experiences that’s putting the customer first. These mobile-only banks are using machine learning to gain greater insights into customer behaviour, then creating uniquely tailored banking experiences for each customer (Pssst..we’re doing this too with our Performance Profiling). This makes the offers and advice we receive from our bank far more relevant, allowing us to manage our money the way that suits us. The technology involved has now become so intelligent and seamless that many of us don’t even realise the advise we are getting isn’t human. Spooky, right?
Well it doesn’t stop there. Banks are now using AI to help them with a whole host of operations and have invested $11 billion into the technology since 2010. But with so few people saying they trust AI when it comes to handling their personal finances, why are banks so insistent on exploring it further?
The benefits of adopting AI for banks are staggering; reducing overheads and streamlining labour intensive tasks to improve nearly every facet of the banking process.
From HSBC using it to detect money laundering, fraud and terrorist funding, to JP Morgan trading stocks with the help of robots, AI is certainly here to stay.
But what does all this mean for us lowly humans? It’s predicted 30% of banking jobs could be wiped out by AI in the next five years. However, it’s not all doom and gloom; the purpose of AI in most instances isn’t to replace people, but free them from the menial tasks that take up so much of their time. It has the potential to cut operating costs by up to 3.9%; but more importantly, gives staff the time and freedom to focus on the more personable and creative elements of their role - in theory improving the overall customer experience.
With the help of AI banks are becoming smarter. The robot run branches may be a long way from becoming mainstream, but machines are working hard behind the scenes to improve the way banks handle our money. Whether it’s increasing security or improving customer service, the bank that’s run by robots is now much less science fiction, and quickly becoming science fact!
To see how senior decision makers in the IT sector are planning to invest in AI, read the the Feefo AI Report here!
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