There’s no doubt that artificial intelligence (AI) and machine learning are already having an impact on how we work – across all industries. And, the banking and finance industries are no exception. According to artificial intelligence research by the World Economic Forum, 76% of banking CXOs agree that adopting AI will be critical to their organization’s ability to differentiate in the market. Key findings from “The New Physics of Financial Services” are outlined below. Read on to learn more about how artificial intelligence in banking is transforming the industry.
Distribution Of Talent Will Shift
Instead of increased operational efficiency in the back office being a competitive differentiator, AI will level the playing field across the financial industry. The front office is where differentiation will happen and, therefore, where skilled talent will be needed. Roles will be less about processing and more service-oriented.
AI Will Enable Differentiation
Price, speed and access will be given thanks to AI-enabled services, but customization, engagement and interconnectedness of data will emerge as differentiators for attracting customers. Firms who have experience building products based on research will have an advantage here. And margins will shrink for those who can’t innovate quickly enough to remain in step with the market.
Customer Experience Will Change
Because of the sophistication of data, customers can expect to receive personalized advice and even automate routine decisions. This will lead to a reduction in the frequency of customer interactions, therefore interaction points are reserved for the most important transactions. Institutions focused on satisfactory customer experiences will stand to gain the most from this transformation.
Midsized Firms Are Disappearing
This is due to their inability to invest in AI and the digital transformation. Large firms will benefit from the scale of data at their disposal and creating products that appeal to the largest number of customers. Niche firms will capture customers who aren’t placated by the large firms’ mass offerings – as long as they effectively market their differentiators.
Data Partnerships Will Emerge
This still has time to play out – and can always change – but because of the growing reliance on data, financial institutions will build data partnerships with other businesses to help advise on business strategy and product development. This can create an imbalance of power in the market and open customers up to more security risks.
Check out the artificial intelligence research report, “The New Physics of Financial Services,” for examples of all of these key findings and more in-depth insight into what the future of artificial intelligence in banking looks like.