What is conversational AI and why are banking customers demanding it?Ram Menon
Conversational AI will usher in a new era of harmony between man and machine, with AI taking up all the grunt work while human elements of judgement and empathy are further strengthened.
Ever engaged with voice assistants on smartphones or smart speakers? Have you noticed a chatbot on a website you open? Chances are, you have. What once seemed like science fiction is now an everyday reality. It’s artificial intelligence (AI) and machine learning (ML) that have made this happen. ML and AI are no longer mere buzzwords indicative of a trending phase. These are concepts that have moved into the realm of permanence and have already been adopted by many a sector. Banking is among the earliest sectors that has taken to AI, both in India and abroad. A report released in March this year by the AI Task Force set up by the Indian Ministry of Commerce & Industry noted that the fintech sector is one of the ten domains of relevance to AI implementation in India.
The global business value generated from AI will touch $1.2 trillion this year, a growth of 70 percent from last year, as a Gartner report notes. Come 2022, the value will go up to $3.9 trillion, the report adds. With specific reference to banking, an Accenture survey titled ‘Future Workforce Survey — Banking’ explains that banks investing in AI have the ability to boost revenues by 34 percent on average by 2022. The study also notes that 77 percent of banks intend using AI for automating tasks over the coming three years. India is not far behind, and, according to a PwC FinTech Trends Report India 2017 study, over 36 percent of large financial institutions have already invested in AI technologies. Nearly 70 percent intend to do so in the near future.
With intent in place, the question of how AI helps banking comes up. A significant benefit of AI in banking is that it helps in regulatory compliance, which involves huge costs. AI-based assistants can help in monitoring transactions. Another benefit for banks that employ AI comes via fraud prevention. Lowering operating costs is yet another advantage; much of banking has now been digitised but there is still plenty of paperwork, and that can change with AI. Natural language processing (NLP) technology along with automation can minimise errors and save time. The use of AI-based assistants allows humans to focus on other important tasks, which means greater profitability.
AI and the customer
While all the above advantages are from the perspective of banks, there are other benefits for the customer. In an era where banks can’t just pride themselves on a good financial product or service but also need to focus on customer experience, AI can come into the picture in a big way. Customer preferences have gone a long way in ushering in the AI revolution. Today’s customer expects engagement anytime anywhere and is at ease with other intuitive interfaces. The customer of today transacts on smartphones, is familiar with multiple touch points and has already been provided an omnichannel experience by entertainment and retail brands. A Gartner study shows that by 2020, 85 percent of all customer-related interactions will see automation. Considering that millennials form 34 percent of the population in India, Indian banks are now gearing up to meet their expectations.
Indian banks making a success of AI
Banks can help customers understand and learn about all their offerings and even create bespoke packages to suit customer needs through chatbots and other AI-based platforms. A consequence of this is boosting customer trust and loyalty, and more conversions.
Going forward, AI will not just keep banking safe from cyber attacks and streamline operations but also ensure that human capabilities will be leveraged better. While AI takes away grunt work, the importance of human elements such as empathy and judgement will only get strengthened further. Conversational AI will usher in a new era of harmony between man and machine.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)