For the banking institutions, ensuring the adoption of AI technologies across the enterprise is no longer an option but a strategic imperative.
FREMONT, CA: Many banks have failed to deploy AI innovations across the enterprise after experimenting with a few use cases. Lack of a defined AI strategy, an inflexible and investment-starved technology center, fragmented data assets, and outdated operating models that suppress collaboration between business and technology teams are some of the reasons that have hampered the growth.
Several digital engagement developments have accelerated due to the COVID-19 pandemic, and big-tech firms are targeting to enter financial services as the next adjacency. In order to compete effectively and survive, banking institutions must embrace AI innovations as the basis for new value propositions and distinct customer experiences.
Why must banks become AI-first?
Banks have continuously adapted the latest technological developments to redefine how customers communicate with them for many decades.
Very few will disagree that it is the AI-powered digital era, which has been aided by declining data storage and processing costs, increased access and connectivity for all, and rapid AI technology advancements. These technologies can contribute to increased automation and can often outperform human decision-making in terms of speed and accuracy when used after applying risk management.
Disruptive AI innovations will help banks achieve four main goals: higher earnings, at-scale personalization, distinct omnichannel interactions, and faster innovation cycles. Banks that struggle to integrate AI into their core strategy and operations or become "AI-first," will have the risk of being overtaken by competitors and abandoned by their customers.
What is the future of the AI-bank?
In the AI-powered digital era, to meet the customers increasing expectations and beat the competition in the market, the AI-first bank will deliver propositions and experiences that are intelligent (that is, suggesting actions, predicting, and automating essential decisions or tasks) and customized (that is, important and timely, and based on a better understanding of customers' past behavior and context). It will also offer truly omnichannel (easily spanning the physical and online contexts through multiple devices and providing a consistent experience) and combine banking capabilities with related products and services outside of banking.
Internally, the AI-first bank will be designed for operational efficiency by extreme automation of manual activities (a "zero-ops" mindset). The substitution or augmentation of human decisions in various areas of bank operations will be done through advanced diagnostic engines.