Digital technologies are irreversibly changing the way we interact with different businesses. Many times, the play of technology behind the scene is so subtle yet widespread that we fail to notice it in action. As digital transformation slowly yet surely leaves its footprint in our lives, AI is the next paradigm shift that would drive this change.
Today, in the banking sector, customer experience has become vital to ensure good business. Banks can leverage the power of big data analytics and machine learning algorithms to study customer behavior to arrive at insights that would help in creating key differentiators and improve business performance. While incumbents of the banking industry might have viewed FinTech players as disruptors and competitors, only a synergy between these two can result in solutions that meet the expectations of the well informed and ever demanding customer.
How AI Can Boost Banking Services
Banks worldwide have been adopting basic AI solutions for some time now. What once started out as an automated customer response system that could handle a set of predefined queries has now become a dynamic virtual assistant/chatbot. These chatbots are designed to learn and evolve by handling customer queries of varying complexities. The 160 % month-on-month growth of OnChat (HDFC’s Facebook Messenger chatbot) since its launch in December 2016 is a notable example of how popular such virtual assistants are growing to be.
By harnessing the power of AI, such technologies can replicate human interactions to perform several different transactions related to account management, funds transfer, bill payment, and more.
At the heart of a successful AI implementation is machine learning (ML). Thanks to the huge amounts of user data being generated due to the prolific use of SMAC (Social, Mobile, Analytics, and Cloud) technologies, AI based machine learning systems can evolve quickly from a rudimentary system to one that can handle complex queries in a very short time. After all, machines will never suffer from fatigue like we humans do. They are constantly collecting data, analyzing them, and evolving. All this equates to one thing – rapid change in traditional business models and whether we like it or not, it is the only way forward.
New Business Models And Fear Of Job Loss
The transition to AI-driven platforms is leading to the evolution of existing business models at banks. The move to digital not only cuts down overhead costs but also creates a pull model where users approach the banks at any time and from anywhere. The eradication of physical boundaries has resulted in new business approaches that address customer acquisition, account management, online shopping, bill payment, recharging, travel services, entertainment services, and this is simply the beginning.