How BFSI Artificial Intelligence Focuses on Providing Personalized Experience to Customers
The financial industry is a data-intensive business, and with the rise in customer-centricity, BFSI artificial intelligence is inevitable in the sector. Tech-savvy customers exposed to progressive technologies expect financial institutions to deliver seamless experiences. Now, the integration of intelligent algorithms for risk alleviation and compliance, fraud detection applications, and anti-money laundering, primarily form the demand for the technology. But before we expound more on the ingenuity of the technology, what’s artificial intelligence in BFSI (Banking, Financial Services & Insurance)?
Artificial intelligence in BFSI is the imitation of human intelligence into machines with the assistance of sophisticated machine learning, cognitive computing, and natural language processing algorithms that assist in customer relationship management.
With that in mind, let’s us delve into some of the ways the financial institutions can improve on customer experience through artificial intelligence.
Reinforce Lending With Predictive Analytics
It’s with a fair amount of certainty that the banking sector is a data-heavy industry, especially with the loan facilitation. The main core business of banks is lending, among other activities, which means that appropriate measures must be in place. The right decisions must to reach upon as data mainly drive it. Now, if you’re in the banking sector and still implement a lengthy-paper-based application process, then you’re missing out a lot. And that’s where predictive analytics comes on board to help streamline the constant customer data mining and analytics processes that go along with lending resulting in expeditious loan completion and more customer interaction.
But what’s all about predictive analytics?
Predictive analytics encompasses the application of data, statistical algorithms, and machine learning techniques to identify the possibility of future outcomes based on historical data. Here’s the thing, we humans cannot predict future outcomes, but BFSI artificial intelligence creeps into historical data by offering the best assessment of what will happen in the future.
Personalize Customers’ Banking Experiences
Over time, banks always target customer microsegments and tailor offers to help them differentiate their institutions, build customer engagement, and develop a competitive advantage. But it follows that the advantage is steadily eroding owing to the upsurge of tech-savvy companies that put personalization at the prime center of their business models and optimize it to attain significant performance gains. Now, the true personalization can only be described as a deeper understanding of each customer’s distinct needs and orchestrating a set of tailored experiences across the digital and human channels. The BFSI artificial intelligence next frontiers for banking include customer adoption of voice interfaces and intelligent agents.
The paradigm shift is now more on value addition that communication brings to the customer rather than the mode of delivery. Some of the core components of success personalization include:
- Drastic pricing transparency such as Progressive Insurance which establishes trust and assurance of utilizing the personal information to help customers in decision making
- Implementing a golden customer record that integrates purchase data, preferences, and other behavioral information from several engagement systems and data sources into a single view
- Enhancing omnichannel engagement, which in retail raises lifetime value by a huge margin.
Making Financial Health Recommendations
Now, as we move into the period of data explosion, it follows that more relevant ways of scanning through a huge amount of data are important. That cannot be possible without having the right artificial intelligence tool, and Recommendation Engines is one such tool. Well, what it does is that it filters and ensures that consumer gets to see data that is relevant to their taste and preference while spending minimal time searching for the appropriate data. Today, several banks providing personal financial management simply display customers their categorized spending, which highlights their poor habits of spending. This, therefore, means that with BFSI artificial intelligence taking the center-stage financial institutions need to answer the question of customers’ healthier financial living. And by adopting of machine learning in recommendation systems that scan, search, filter and offer useful information to the customers based on their needs and tastes.
Automation of Administrative Tasks
The revolution of technology now brings about AI technologies, including robotic process automation (RPA), natural language processing (NLP). With the use of these technologies, banks improve on their front-office and back-office processes. The high-volume and repetitive nature of data give artificial intelligence an ideal candidate for intelligent automation. It follows now that banks can communicate and influence information to their customers through chatbots and virtual assistants. Implementation of BFSI artificial intelligence technology detects points of compromise as soon as they occur, thus, assists in fraud detection, protecting customer information. For instance, companies such as MasterCard and WorldPay have for several years detected falsified transaction patterns thanks to artificial intelligence.
More certainly, there are customer’s engagements and retention improvement through automation of many of the administrative tasks done by employees giving them ample time to build customers’ relationship. With the adopting of automated technology, the financial institutions will drastically cut on cost, improve functionality, and increase assistance. Now, systems equipped with AI can exponentially search more data than what humans can and provide a high level of transparency for clients. Customer’s confidence in the bank institutions is paramount and should never be taken for granted.
The financial institution cannot afford to rest on their laurels as they are poised to grab the next opportunity that comes with technology. As they strive to benefit from what BFSI artificial intelligence revolutionary transformation, they have to understand customer behavior. Each financial institution has uphill tasks to ensure that they retain their customers, and one possible way is through adopting artificial intelligence. Despite the financial cost involved in implementation, one can’t shy away forever from technological progress and not encountering it now may be costly in the long run.