Dominant financial services institutions, currently, focus on; a scale of assets, mass productions, relationship exclusivity, switching costs, and dependence on the integrity of humans. However, the future will change with the assistance of artificial intelligence.
With the adaptation of new technologies, leading companies will begin to implement data-driven decisions, personalized customer experiences, and workflow optimization. From this, human performance becomes highly valued.
New technology always brings in a level of excitement. What can this new technology do? How can this technology aid me, and make me better at my job? The same mindset goes for artificial intelligence (AI) pairing with financial services.
How AI Helps with Financial Services
“A recent survey by DBR Research found that 48% of banks with more than $50 billion in assets have deployed an AI solution, compared to just 7% of banks with between $1 billion and $10 billion in assets.”
Artificial intelligence (AI) can assist financial companies in many ways, specifically with research and analytics, identifying anomalies in customer statements, virtual assistance, and customer experience.
Research and Analytics
AI can take a deep look into research and analytics. With this next level of research, a company could examine hundreds of more data documents that normal individuals wouldn’t be able to digest properly. This cuts out the need to repeat tasks and optimizes the back office operations.
With proper algorithmic programming, these AI technologies can detect problems on customers’ profiles. Whether it is statement issues, fraud, or simple clerical errors, AI can detect and alert these anomalies quicker than the normal worker.
AI is the primary technology in virtual assistance. These platforms implement virtual assistants to answer calls, respond to simple questions, and provide support and feedback as needed. These virtual assistants can come in the forms of simple videos on the screen, or intelligent chatbots programmed with numerous algorithms designed to provide knowledgeable answers.
Ultimately, AI in the financial services industry will be directed towards optimizing the customer experience. Through ideal financial guidance to the actual user experience through engagement, AI will enable a fairer and more accessible financial system.
The future customer of financial services companies will have automation-based profiles. These new programs will ideally improve the customer’s financial outcomes based on data-driven decisions.
AI Has Its Limitations in Financial Services
Authorities experimenting with various features of artificial intelligence (AI) at Goldman Sachs Group Inc. and Morgan Stanley say, “Artificial intelligence could be useful in detecting fraud and reducing errors in algorithmic trading, but there are still many limitations with the technology as it exists today.”
Who Will Be Responsible
“The first example shows that tort and agency laws are written with the presupposition that the actors involved are humans. If an AI engine recommends an investment that breaches a fiduciary contract and leads to losses, what recourse does the investor have?”
Who will be accountable when intellectual machines are making decisions?
Artificial Intelligence Can Be Fooled
Another problem is that AI programs, no matter how many algorithms have been uploaded, can still be fooled by the low hanging fruit.
An AI program could assume one outcome will happen based on strategic analysis from previous days. However, the human providing the same service could anticipate an increase based off of previous interactions which could be the better choice.
In the financial services industry, the end game is always a key focus to take into consideration. Sometimes, the easiest or quickest option isn’t the best. That’s the difference between AI and human judgment.
Artificial Intelligence vs. Employment
As the technology optimizes and automates many roles to enhance the customer experience, employees are worried their jobs will be replaced. However, this isn’t technically the entire story. Yes, some jobs will become automated, but the roles will develop into more customer-focused positions that strengthen relationships and improve retention. Therefore, AI won’t eliminate entire careers, but rather guide employees to enhance their current skills to optimize other aspects of the business.
What the Future Holds for AI and Financial Services
AI needs to remain transparent. As new technology develops, AI will grow to learn and become smarter. Humans learn, but not at the same rate. Therefore, a level of transparency and explanation must be maintained.
“An AI system that can explain its decisions is helpful for two main reasons: when you have to decide whether to override the decision it’s making, and when you want to try to improve decisions it will make in the future,” said Peter Norvig, director of research at Google.
The continuous monitoring of AI is required. Questions will continue to be asked, and the data will undergo deep analysis, even being tracked down to the source. Another big topic will be, are the agencies complying with privacy laws? Thus, ensuring they aren’t misleading or negatively impacting the customers.
All in all, the future with AI is a bright one filled with endless possibilities.