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It’s rapidly becoming clear that the financial services industry is undergoing a major transformation because of advancements in artificial intelligence (AI) and allied technologies. The World Economic Forum, in association with the Cambridge Centre for Alternative Finance, has revealed that 85% of financial services organizations have already deployed AI-based solutions. Everything from compliance automation to fraud prevention now seems destined for AI solutioning, translating to reduced costs and increased revenue.
Even as AI unleashes new potential for the industry, it also introduced new disruptions in traditional operations and paves the way for new operating models and innovations. Financial institutions are leveraging AI to not only differentiate their existing products and services but also introduce innovations. This serves a two-fold purpose – engaging customers with bespoke user offerings and enhancing their competitive posture against digital-native FinTech companies. At the current pace of adoption, experts believe that the next two years will lead to mass adoption of AI across the financial services industry.
In this blog series, we will explore multiple dimensions of AI’s impact on the industry and what it means for financial services organizations embarking on their AI adoption journey. In this blog post, we shall look at the key drivers of AI in the industry. Subsequent blog posts in this series will focus on challenges witnessed by enterprises in implementing AI within AML function, the rising role of AI in detecting and preventing money laundering, and leveraging human-machine convergence for gaining competitive business advantages.
With every passing day, financial services enterprises are becoming more proficient at utilizing every advantage that AI offers to strengthen their client base. With AI algorithms, financial institutions can accomplish tasks like preventing money laundering in a matter of seconds, which would otherwise have taken them hours or days. Also, banks can manage and derive insights from massive volumes of data at unparalleled speed. Features such as chatbots, voice AI, biometric fraud detection, knowledge management systems (KMS), and digital payments advisers ensure that AI is indispensable.
AI-powered chatbots with embedded Natural Language Processing (NLP), elevate the customer experience by engaging and interacting with them 24x7, thereby improving online conversations. Besides responding to customer queries and helping them with their account details, today AI-based chatbot services for the financial industry help customers to open new accounts and direct their complaints to suitable customer service verticals. Over the years, HCLTech has deployed chatbots in various engagements as a part of their contact centers and learning management systems to enable their teams and customers to access relevant information with ease.
Recently, ChatGPT has had a massive impact on the financial sector with its expertise in handling complex financial questions and providing reliable and accurate responses. Unlike traditional chatbots, which use rules to respond to questions and requests, ChatGPT uses a deep neural network and natural language processing (NLP) to generate responses based on its learning from conversations it has had with humans. With such technological advancements, we have the opportunity to take our Customer Engagement and Knowledge Management Systems to the advanced level, providing accurate & faster responses to more complex questions and requests, while adapting to the context of the conversation. With its ability to engage in more authentic, human-like conversations, it is expected to impact GenZ employees and customers in an unmatched manner.
The impact of Generative Pre-trained Transformer (GPT) technology on banking, financial services, and insurance (BFSI) is expected to be significant as it not only improves customer service and support but also helps in providing personalized and highly relevant offerings. It can also analyze financial data and make informed investment decisions. Thus, improving the customer experience, satisfaction, and loyalty.
Voice AI solutions transform Interactive Voice Response (IVR) systems into sharper bots equipped to handle complex client interactions in the BFSI sector. Using NLP, it can detect patterns in customer communication and generate insights into their needs and preferences. We have been deploying speech analytics in contact center services to capture call sentiments, drive performance, and actions, and enable customers to avail of customized offerings.
AI-powered voice assistants can engage customers in a seamless and personalized manner, just like a human customer service agent. Through Voice AI, a customer can receive suitable assistance by speaking into a phone, instead of enduring an exhaustive checklist being narrated by a robotic voice. HCLTech has been performing risk assessments to gauge the effectiveness of conducting voice-recognition-based customer verification. However, the advent of VALL-E, Microsoft’s voice-mimicking AI tool, has made us reassess the business risks and review other tested options such as multi-factor authentication. We are consistently reviewing the changes to detect operational and cybersecurity risks to ensure a smooth and safe digital experience for our customers.
AI can process high volumes of market and customer information and provide it to financial teams in a short timeframe while continuing to learn even with changing circumstances and information. According to a recent study, financial enterprises are using AI for the following benefits:
From empowering financial institutions by automating their knowledge workforce to making automation smart enough to eliminate cybersecurity breaches- the possibilities of AI in the BFSI space are endless. In a very limited time, AI has become an integral part of the business processes for the Financial Service industry, innovating, and evolving with time with minimal manual intervention.
AI financial institutions are expected to be able to optimally leverage both machine and human capabilities, driving cost and operational efficiencies and delivering tailored solutions. As many industry leaders adopt AI and conduct due diligence to utilize its full potential, the time has come for all organizations to safely embrace the technological advancements and become future-ready.
Sugata Gupta is an evangelist in the Financial Services space, with over 33 years of experience in leading global Strategy and Operations for multi-billion-dollar corporations. His roles are rooted across a wide spectrum in Banking, Insurance, Capital Markets and Wealth Management with a focus on driving Digitalization to reduce risks, enhance efficiency and augment client experience. Currently in HCLTech, Sugata is responsible for managing the spans of Transformation, Solutioning and Delivery with a team of over 10,000 members. Prior to HCLTech, Sugata has led teams in Citi across Asia and Europe for 26 years where he was responsible for setting up Global Centers of Excellence, Business Transformation and Product development. Sugata is a Qualified Chartered Accountant, Cost Accountant and an alumnus of Indian Institute of Management, Ahmedabad.
