Artificial Intelligence in Mobile Banking: Reshaping The Customer Experience

 

Artificial intelligence (AI) in banking is not a new concept. The ability for machines to interact and learn to complete tasks previously done by humans goes back decades. The availability of data, open-source software, cloud computing, and fast processing speeds are contributing to the widespread adoption of AI in the banking industry. This has significant implications for financial institutions as new technical capabilities and contextual mobile services can help them stay relevant in the market.

 

It seems as though every week there’s a new technological breakthrough where a new task is completed using AI. From Siri to Amazon’s Alexa, the idea of having a personal assistant to help tackle everyday tasks is becoming more welcomed by users everywhere and consumer expectations are at an all-time high for personalization.

 

 

 

 

AI can be used in different ways in varying industries, ranging from weaker AI — such as Apple’s Siri — to more complex deep learning algorithms where the machine functions similar to the human brain. Although “strong AI” is far from near, we are seeing technical capabilities advance with every passing week. In fact, 62% of organizations will be using artificial intelligence technologies by 2018.

 

What is artificial intelligence? It can be classified as a group of related technologies including natural language processing, machine learning, and expert systems. These functionalities can comprehend and behave similar to how the human brain does, which have already transformed the way in which companies look at the overall customer experience.

Remaining Relevant in Today’s Mobile App Market

Most banks, however, are just in the early stages of adopting AI technologies. According to a survey conducted by Narrative Science and the National Business Research Institute, 32% of financial services executives confirmed that they are already using AI technologies such as predictive analytics, recommendation engines, and voice recognition. Further signaling banks’ commitment to AI adoption, The Royal Bank of Canada recently added the Siri functionality to its iOS mobile app. Traditional retail banking providers are now finding themselves exploring AI technologies with more urgency to enhance the customer experience and remain relevant in today’s market.

 

 

 

Source: RBC.com

Personalizing the Banking Experience

Of the 85 million millennials – regarded as the largest generation – over 67% rely on mobile banking and check their phones 45 times per day. Apps that are equipped with conversational AI will be the ones to meet users’ expectations with contextual, predictive, and personal services.

 

Varo Money is a company that is already reinventing how banking is done, entwining financial experiences into their users’ daily lives. Their app Varo, is an intelligent mobile banking app that improves consumers’ financial health by encouraging positive spending, savings, and borrowing habits. Intelligent banking apps can provide customers with personalized insights and recommendations wherever and whenever they want. Here are a few main ways in which AI can personalize the mobile banking experience:

 

Customer Support: The number one trend identified in the 2017 Retail Banking Trends and Predictions was a renewed focus on the customer experience. Users are expecting the same level of personalized interactions and support that they are already accustomed to with services such as Amazon and Netflix.

 

Gathering data from mobile devices and using analytics and machine learning on the back end can either provide users with hyper-relevant information or redirect them to the correct channel without having to deal with all other departments. This eliminates the pains of not being able to reach the appropriate customer service representative. Questions and concerns the user has can be answered immediately in real-time.

 

Advising: Users are more likely to share their personal information if they can receive custom advice, offers, and service based on this shared insight.

 

 

Source: Appinventive

 

Personalized communications and advice enabled by AI can be provided by robo-advisors, which are online wealth management services that generate automated, algorithm-based portfolio management advice without the assistance of a human representative.

 

Personal Planning: In addition to providing personalized advice using chatbots, AI can help customers plan for events in their future. AI-enabled mobile banking apps can provide specific strategies for users depending on the stage of life they’re entering. For example, if a user is purchasing a house for the first time, the app can generate a budget with forecasted expenses in the near future.

 

 

 

 

Automated Transactions: Users can automate transactions and bills according to the dates they’re due, eliminating the tedious task of manual entries.

 

Personalized Reminders: Reminding users of their current balance will help them stay within their budget. The reminders can also be set for pending bill payments and other upcoming expenses.

 

Mobile service companies such as Moven, lets users track their spending and boost their savings with automated, personalized recommendations via a specialized debit card linked with their mobile app. This kind of innovative thinking allows banks to push the boundaries of what they can offer their users to enhance the overall customer experience.

 

 Download the 2017 State of the Nation Enterprise Mobility Report to gain exclusive insight on the current mobile app space. 

Barriers to Adoption

New innovations in data analytics empower financial institutions with systems that are so smart, they learn on the go, refining each algorithm and improving their results over time. However, adopting AI in your mobile strategy can be complicated. An Efma/Finacle study found:

 

• 50% of banks listed their legacy systems as the biggest challenge they face
• 44% a lack of unified vision
• 38% shortage of skills and experience

 

While many barriers still exist and banks are slow to adopt, AI technologies are gaining momentum and have the potential to transform the industry in completely new ways.

The Future of Artificial Intelligence in Banking

One of the earliest uses of artificial intelligence in banking was for fraud detection. Today, AI has not only significantly improved the monitoring process, but is able to respond in real-time to potential threats of fraud. Now, we’re seeing a huge shift towards personalization as machine learning is being used to evaluate transactions using millions of data points.

 

 

Conclusion

In short, AI has the potential to fundamentally transform how banks are using mobile to deliver a personalized customer experience. With their ability to fully understand their users’ behaviors, financial institutions are in the best position to apply AI technologies to their mobile strategy. Soon, all financial institutions will be leveraging the power of AI to deliver better experiences to their customers, all with lower costs, reduced risks, and increased revenues. Banking institutions need to pay attention to technological advancements within the AI landscape and plan ahead for what’s to come. What may be recognized as ‘amazing’ today will be commonplace in the near future, which is why it’s important for banks to remain relevant in the mobile app market.