Digital banking is here to stay. And for customers like me it has steadily became a necessity. The day I discovered I could do my errands without leaving home, at any time and wearing only my pajamas, my life crossed a point of no return.
Worldwide, digital banking has given banks the opportunity to increase sales and optimize costs everywhere. Digitalization has allowed banks to get closer to their customers and satisfy more of them in a personalized level, thus encouraging them to use digital banking more frequently, to increase the number of transactions and operations and thereby boost the bank’s income.
So far, so good. But how to keep up the momentum?
In a fiercely competitive market, the larger banks are now beginning to accept and accelerate the use of AI-powered software and autonomous cloud technology, both of which are proving to be a huge drive behind their growth and a boost for the efforts to deliver omnichannel experiences to customers. AI does not imply the robotization of banking services or machines that make decisions. Instead, at the forefront of an AI process there are real human beings—who may or may not be wearing pajamas—that design the application and carefully input the data.
At the receiving end, they interpret and react to the information provided. AI involves the use of wide spectrum of data, not just the data that is collected and collated within the bank directly from the operations and transactions, but also data from all available external sources, which builds a wider picture of the customer, her needs, her preferences, etc. and a wider picture of the options that can be offered to her.
Most AI applications that are currently available connect and coordinate data, insights and smart outcomes across all the operational functions of the bank, on all its platforms and through all available channels.
This breadth of connected intelligence provides real-time information and analysis to allow better decision making, which, in turn, leads to increased customer satisfaction, increased productivity, and improved results.
AI moves banks from programming to perform specific, and often un-connected tasks, to autonomous systems which can actually self-learn, i.e. adjust automatically, with little or no human intervention. This is a branch, or sub-set, of AI called KEEL technology, Knowledge Enhanced Electronic Logic, wherein the system is programmed to interpret the information it gathers and analyzes and to react to that interpretation. This provides banks with their aspiration to serve customers’ real needs in real time.
But this is the bit about AI that people find scary: computers that react like Hal in the Stanley Kubrick film 2001, taking over and making decisions for us that may not be in our best interests. However, AI developers such as Oracle and IBM are currently working on the next phase of business analytics that will combine data with human knowledge and experiences. Current attempts are everywhere: self-driving vehicles, virtual assistants and, to date, they haven’t been particularly successful or satisfying. Most developers admit that machines will never be able to entirely replace the human element behind establishing criteria or applying ethics, so the chances of a Hal happening are negligible.
Of course, not all banks are currently in the position of being able to make quick changes to their existing IT structure in which they have already invested so much time and money in simply getting digitized. But customers nowadays are driving the need for additional investment, through their expectations for personalized service and because of the increasing propensity for instant gratification.
Banks should take note: there is no way in which we, customers wearing pajamas will dress up and come back to the line. It’s just like that nightmare in which one is suddenly back in highschool, and thinking: “Wait, I graduated fifteen years ago, why do I have to go through all this again?” At the end of the day, it is not a matter of banks needing to adopt AI, because customers have already adopted it.
Instead, there is already a whole new customer idiosyncrasy related to digitization that banks need to candidly embrace, and the only question that remains is how quickly can banks keep up with the digital world we now inhabit.
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