Artificial intelligence is not sci-fi. The AI revolution is here, now, changing user interfaces and the way consumers interact with businesses, products and services. The question is not whether it will change the banking industry, but how you will be able to use that change to create new value.
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Few technologies are as evocative as artificial intelligence. No wonder it’s a staple of science fiction, where thinking machines frequently overshadow human minds in strange and distant futures. Such an image might be great for popular culture, but it makes for spectacularly poor business decisions. After all, we don’t have to wait for some far-off future when it comes to artificial intelligence (AI). It’s already here, being applied on a massive scale, and it has many radical opportunities to offer us.
If we want to seize those opportunities and build on them, we must understand exactly how real and pervasive artificial intelligence has become. Already, artificial intelligence is the driving force behind user interface innovations in a wide range of industries, from personal electronics to social media. It lives in our phones, the tools we use at work and the connected devices in our homes. Facebook uses it to tailor newsfeeds to our personal interests, Google uses it to provide personalized search results, Amazon uses it to make shopping faster and easier. Everywhere you look, artificial intelligence is changing user interfaces for the better, making interactions between consumers and businesses easier and more seamless.
All of this begs the question: how can banks use AI to meet evolving customer demands? What sort of world can the banking industry build on the back of the AI revolution? And how will an industry that still relies on traditional interactions be able to seize these opportunities?
The Quiet AI Revolution
It may come as a shock to those of us who grew up in the pre-smartphone era, but the consumers of the future are already learning to take AI for granted. Today’s toddlers know they don’t have to ask their parents to play their favorite song for them – they can simply ask Amazon’s Echo. And much like children who grew up using tablets will also try to swipe the pages of a magazine, this generation will grow up expecting the world around them to listen to their needs and answer accordingly. This is the very essence of the AI revolution: effortless interactions between man and machine.
As AI becomes the new UI, consumer expectations will shift rapidly. And while we may not expect a machine to be as intelligent as we are, we will expect it to understand us. Already, advanced speech and image recognition are becoming the norm, making it easier for us to get technology to do what we want. Through AI-driven user interfaces, we will be able to do away with screens and talk to the smart objects we surround ourselves with, creating hidden armies to do our bidding.
It’s easy to imagine the possibilities. In the not-too-distant future, AI-driven chat bots will be able to provide you with a personalized mortgage in real time, all carefully tailored to your financial data. And instead of winding your way through a multitude of tedious touchpoints to manage your finances, you’ll be treated to a smart, unified ecosystem that lets you control every facet of your financial life and anticipates your needs at every turn.
Thanks to this quiet revolution, there is no shortage of opportunities for banks to fundamentally transform their services and user interfaces. AI business trends such as data-driven personalization, digitally-enhanced productivity and intelligent fraud detection will have a massive impact on the financial service sector in the coming years, paving the way for radical innovations and unique opportunities.
Skipping Ahead in the Digital Transformation
Managing your personal finances. Making sensible, low-risk investments. Taking out a small business loan or a mortgage. Opening a line of credit. There was a time when most consumers never imagined doing these things online. Now, they can’t imagine ever going back. And with the trend towards the democratization of artificial intelligence, the market is poised to make another leap forward.
We are rapidly approaching the era of hyper-personalized, intelligently automated financial services. If consumers are already prepared to exchange their personal information in return for better search results or music recommendations, it won’t take long for them to embrace automated banking. After all, there’s no reason an AI can’t be a financial advisor. When it comes to analyzing gigabytes of raw financial data and selecting for favorable outcomes, machines already routinely make faster, more effective decisions than humans do.
Fintech startups realize this. As they tap into the potential of AI-driven user interactions to change the market, they are already nipping at the heels of traditional banks. Shifting client expectations, innovative competitors and new regulatory changes such as the revised Payment Services Directive (PSD2) will only serve to accelerate these digital disruptions.
The challenge is clear, and banks will have to reinvent themselves to answer it. While their access to historical data provides a valuable edge, new competitors are more agile and can operate at lower costs. To maintain and expand their competitive advantage, banks must be able to wield new AI and UI solutions effectively. They will have to foster their own innovative capacity in a way that is not traditionally familiar to them, and embrace the potential of partnerships with other, less traditional brands.
Capitalizing on Artificial Intelligence Trends
When faced with a fast-growing technology like artificial intelligence, it’s tempting to focus on the risks to your organization. Are your development practices agile enough to deliver a truly innovative UI experience that is up-to-date with the latest AI technology? Will your legacy IT systems be up to the task of rolling it out? And what about the privacy implications?
Certainly, these are all important risks to address. They are real. They have impact. They cannot be ignored. But the greatest risk of them all is not experimenting enough. Artificial intelligence is here to stay, and its impact on user experiences and interfaces will be felt as clearly in the banking industry as they will in any other. To stay behind in traditional comfort zones is to invite irrelevance. The time to act is now. The chance to capitalize on the artificial intelligence trend as it comes into its own is a historic opportunity, and the approaches to seizing it are as numerous as they are exciting.
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Funneling innovations. Generating ideas and analyzing their value at an exhilarating pace. Embarking on new partnerships and business models, be they co-innovation platforms or entirely new AI-driven ecosystems. The possibilities are, in a uniquely practical sense, limitless. Of course, there will be new roadblocks. But with the right partners and the right vision, they don’t have to slow you down. It all starts by asking yourself what’s holding you back. Then, you can work to surmount those barriers and build the value chains that will determine the face of the future.