What do you think of when you hear the phrase “Artificial Intelligence?” A room full of computers? Robots roaming the Earth? Or do you think of a way to run your institution more efficiently and to deliver a better consumer experience?
Artificial Intelligence is a high-tech term, but it actually just means technology that can imitate some parts of human intelligence. One of the most common examples of AI are virtual assistants, like Alexa and Siri. And as AI becomes more and more a part of our daily lives, bankers should start paying attention. A recent report by Autonomous states that by 2030, financial institutions can reduce costs by nearly 20% with artificial intelligence.
In recent research by Varo Money, 79% of American adults (and 85% of Millennials) say they believe that AI could help them better manage their finances. They’re looking for tools and resources that help them save more money, cut down on errors they make when managing their own accounts, and provide better visibility into their spending habits.
The study also found that 52% of Americans said they are frustrated with their current mobile banking solution for reasons like not having access to their banker at all times, not getting insights or recommendations for their finances, and not being able to set goals or automatically save money.
So obviously, there is a disconnect between what consumers want from their financial institution and what they’re actually getting. They want AI to help them when it comes to their finances, and aren’t satisfied with how their current financial tools are accomplishing that task.
Only about 15% of organizations surveyed by the Digital Banking Report “are using AI to compete with peers and identify opportunities in their data that would otherwise be missed.” Of the organizations who are currently using an AI application, security and risk applications are the most popular, with personalization and communication applications coming in second.
When it comes to personalization and communication, one of the most promising AI applications for financial institutions is delivering a better consumer experience. As a local institution, you’re already known for providing great, more personalized service, and AI can enhance that.
Chatbots are a great way to do this. With a chatbot, your institution can have a personalized conversation with an account holder, quickly answer common questions, take care of everyday tasks, and make tailored recommendations based on their behavior. According to the Consumer Banking Insights Study, 70% of community bank and credit union account holders say they see their financial institutions as partners, whereas just 57% of megabank customers feel that way. A chatbot that recommends products and services the consumer actually needs is a great way to be that partner and build a relationship of trust.
As consumers become more and more familiar with AI in other industries (Hello, Amazon), they’re going to expect the same kind of experience from banks and credit unions in the future. In fact, Megabanks are already embracing the trend with open arms. Bank of America already has Erica, a virtual assistant who can help account holders schedule payments, transfer funds, and send money to friends. JPMorgan Chase already uses AI to analyze documents and extract important data.
Artificial Intelligence is something your institution should welcome, not be afraid of. Think of it more as a complement to what you already do well. By keeping an open mind and using it to improve your existing processes, you’ll be able to provide the great service you’re known for while having the technology consumers expect.