Guest contributor |
Most banks by now understand the benefits of adopting artificial intelligence. But being convinced of the value is just the beginning – they also need to implement the technology and may not know how to get started. Here are four insights to help ensure a successful AI journey.
1. The time to act is now
The ‘wait and see’ approach to AI is becoming increasingly problematic, because although firms may not want to be the first to adopt AI, they definitely don’t want to be the last. High-profile institutions like JP Morgan Chase and Wells Fargo have already led the charge on generative AI-based employee tools and AI-powered virtual assistants, respectively. And that means other banks can’t be far behind.
As more institutions experiment with AI, they will find it increasingly difficult to use AI as a differentiator from their competitors. Make no mistake, the AI hype cycle is in full effect, thanks to companies like Microsoft, and that means that customers are waiting to see how banks will leverage this technology – not whether they will adopt it at all. So, get started now, even if that means starting small. For example, organisations can start with a small launch first, then adopt it on a larger scale.
2. Start with a specific target area
It’s essential to have a specific business use case in mind before you begin adopting AI. Simply rushing an AI value proposition to market will never work if there is no clear vision for its usage, as this will make it impossible to budget, among other things.
Financial services providers should always start with the business case so they can actually define what is needed to get done. They should ask themselves questions like ‘why do I want to adopt AI?’ and ‘what’s the problem we want to solve?’. Identifying the business case means they can better understand the return on investment and avoid risks. There’s no option for zero risk with AI but if firms know what they are looking to get out of it, they can define the risk and investment factors, whether it’s worth it and if there’s a way to mitigate them.
3. There is no ‘AI banking’
AI should always be used to better serve the customer. Rather than looking at it as a revolutionary new style of banking, banks should consider it as an advanced tool that can help them to reach their business objectives, of which customer-centricity should be front and centre.
And while AI will allow you to reduce headcount – particularly when it comes to tiresome manual processes like data entry and processing – the industry doesn’t want to lose the human touch. Because, while 77 per cent of consumers say AI is helpful for solving simple banking problems, according to Zendesk’s Customer Experience Trends Report 2023, 63 per cent still want personal, one-on-one conversations with representatives. This indicates that the human touch in banking remains critical, but firms can always use AI to make employees faster, smarter and better at their jobs.
4. Use an AI platform
Like all next-level technology, adopting AI will take considerable time and resources but a platform model streamlines the process. For example, repetitive manual tasks can be automated with an AI script.
When a platform is in place, with all the available capabilities and microservices, companies can adopt AI a lot faster. So, before getting started, organisations should consider working with a strategic partner to implement a platform model. That will make it easier to automate routine tasks, reduce costs and time, and offer superior customer experience.
Thomas Fuss is chief technology officer at Backbase
Discover more insights like this in the Winter 2024 issue of Technology Record. Don’t miss out – subscribe for free today and get future issues delivered straight to your inbox.