There exists a fundamental distinction between a financial institution offering digital services and a lender becoming truly digital.
The digital bank represents Finance 5.0 — the creation of banks which will arise in the subsequent five years. Conventional banks will need to associate with FinTech’s or accept the conversion process themselves. The key to this evolution is going to be the requirement to further build digital capabilities in addition to welcoming a basic mindset change.
AI and Big Data’s function in customer travel:
This shift primarily revolves around a change in the starting stage — banks must devise strategies that begin with the client, rather than the bank. By embracing a customer-focused strategy, banks will realize the need to re-think the customer journey. Seamless interaction is at the heart of this process: providers and touchpoints ought to be available within an integrated, coordinated way.
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AI allows for the likes of Robo-advisors and Chatbots, whilst data collection and processing is needed for this very personalization to occur and is needed for the continual optimization of service delivery and the client experience.
Natural language processing (NLP), one of the key technologies involved with human-machine communication and interaction, has advanced to a level where Chatbots and Robo-advisors can do what is known as sentiment analysis, enabling them to understand the significance, emotion, and intent behind speech.
This then facilitates their ability to respond to and advise people appropriately. NLP not only provides top service at scale but service which feels authentic and natural — support which feels human-human.
In retail banking, the development of this so-called smart-branch makes this shift clear. In doing so, the customer and their travel become the focus.
The importance of both digital and physical touchpoints:
However, as advanced as conversational interfaces and emerging technologies have become, the likes of Robo-advisors currently act to facilitate and enhance consumer participation instead of replacing humans completely.
They’re, therefore, a wonderful illustration of machines augmenting employee roles within the office. Presently, these technologies aren’t and may never be in the stage at which they may replace humans entirely.
A simulation of a machine that is talented at problem resolution management can’t cater to these demands. Given that AI is now not at a level at which it can serve the complex collection of human emotional needs, human presence, and involvement in the supply of service remains crucial.
What is more, the performance of those technologies will always be limited to the methods we, like people, have available to capture and construct data to some machine-digestible form. As such, combining machine and human intelligence remains critical in bringing optimal capabilities from both.
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It is, therefore, very important to realize that bodily touchpoints will not be rendered obsolete — rather, the introduction of AI solutions will ensure that both physical and digital interaction is offered cohesively.
Digital touchpoints render services more accessible to a younger demographic whilst retention of on-site client service and equally meets the need of both the traditional and vulnerable consumers. Digital inclusion shouldn’t result from the exclusion of those most in need of human contact.
Whilst conducive regulation is obligatory for banks to fully undergo this movement, the cost savings involved in the change to automation and integration will be huge. Banks that fail to realize the potential of emerging technologies today are going to be left behind and lose clients everywhere.