Cognitive AI that interacts naturally with customers is the next big technology to disrupt the retail and commercial banking industry. That is according to this year’s edition of Accenture’s Banking Technology Vision, which is already seeing banks use AI to automate repetitive and manual tasks.
Out of 800 bankers survey in more than 25 countries, 71 per cent said the biggest upside from AI is improving customer trust and confidence. 63 per cent said cost saving and improving operations was a big draw, while 62 per cent said better compliance with regulations.
Despite the optimism of many banks, they are still considering how to best achieve a mutually beneficial relationship between man and machine. The majority (90 per cent) believe customers want to understand how AI-based decisions are made, while 29 per cent foresee full transparency within two years.
Although banks expect the behaviour and decision making of AI to come under considerable scrutiny from both customers and regulators, they are optimistic about the future prospects of the technology. 79 per cent foresee collaborative robots (cobots) working alongside their human staff within two years before one day becoming the first point of contact for many customer interactions.
A virtual experience
Extended reality (XR) technologies, such as virtual reality (VR), augmented reality (AR) and mixed reality (MR), will gradually move out of the living room and into commercial locations such as banks. 82% of bankers expect these XR solutions to deliver a more meaningful customer engagement and make banking less of a chore.
Use-cases for XR are already starting to emerge. Hana Bank in South Korea is using AR-based functionality in its mobile app to deliver mortgages to customers, while Fidelity Labs in the US is using VR to improve workforce performance by tracking empathy among investment associates dealing with customer calls.
The data challenge
In the new digital economy, many bankers (84 per cent) are increasingly using data to drive critical and automated decision-making. However, just as many are anxious about the veracity of the data they are using to make these data-driven decisions.
77 per cent of bankers admit that they are unprepared to deal with issues and poor decisions that could result from bad data in their systems, either from unverified data via vendors or malicious actions by hackers. 28 per cent do not regularly check data from their ecosystem or strategic partners, while five per cent rarely verify or not at all.
78 per cent say new risks, such as fake data, external data manipulation and inherent bias, are created by automated systems. Although bankers are aware of the issues with bad data, questionable, risky or even illegal decisions remain a constant risk.
Issues with legacy
Banks are keen to revamp their traditional legacy software setup using microservices, or a series of smaller software services that cross-communicate using application program interfaces. 82 per cent view microservices as important for improving innovation, while 73 per cent aim to increase investment in the space over the next year.
Bankers are also optimistic about blockchain helping them create more modern, ‘plug and play’ architecture and solutions that can replace many legacy systems. 70 per cent expect blockchain to become an important technology within the next three years.
These inflexible legacy systems have created several challenges for many banks which has made it difficult for them to work with partners. Almost half (44 per cent) admit to having more than twice as many fintech partners they did two years ago, which is higher compared to the 36 per cent in other industries.
The connected future
The results in Banking Technology Vision indicate that the banking industry is changing and moving away from the era of mobile banking. They are already using data and intelligence to learn more about customer behaviour and preferences.
In time, AI-based, voice-enabled devices are expected to usher forth a new age of digital-enabled banking. AI-powered insights will be used to deliver valuable services, such as information about balances, payments and loan processing, when customers want and need them.
To get to this point, banks will need to push processing to the cloud and beyond. The journey will not be an easy one, but it can be helped by planning ahead and making the right investments sooner rather than later.
We’ve already assisted banking and financial companies such as Allianz, ANZ, BankWest, Commonwealth Bank, NAB, RBL Bank, Westpac and others with their digital transformations. If you are looking for guidance with the cloud and emerging technologies such as AI, contact us today to learn how we can ensure the best quality experience for you and your audience.