The last decade has seen unparalleled innovation in banking and financial services. At the heart of this wave of innovation has been the cloud, with organisations using it to offer a wide range of new services. The next driver of innovation will be Artificial Intelligence (AI), how will this be deployed to offer improved and innovative services?
The amount of choice in banking and financial services has grown hugely over the past few years, both in terms of the variety of services customers can use but also in the type of company that provides them. Traditional banks have been joined by a whole host of fintech startups, agile and nimble entrants to the market, as well as businesses such as supermarkets which have begun to encroach on traditional financial services.
This increase in services is just as applicable to businesses as it is consumers. With banks reluctant to lend in the wake of the financial crisis, an era of fintech innovation began. While access-to-funding was the principal driver initially, it soon became clear that many areas others of finance and banking were ready for disruption. Now we are on the threshold of a new era of fintech innovation, this time fuelled by the rise in AI.
AI has developed to the extent that it can now crunch datasets much larger, deeper and more diverse than ever before, all using methods derived from Human Intelligence, but at a scale that goes beyond that. Financial services providers – and in particular the fintech firms that can develop and utilise technology much quicker and more effectively than traditional banks – are now deploying AI to offer new and improved cloud-based solutions to their customers that will help them make genuinely helpful steps forward in daily life. Examples include:
Smarter decision-making – the ability to ask the right questions to machines, not humans, and the subsequent analysis of that data, will mean smarter and more informed decisions for fintech providers, on whether to lend, what the risk might be and much more besides.
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Automated Financial assistants and customer support – there has already been a move towards automation in customer experience , but AI can really take this to the next stage. Text chat or chatbots can use data to deliver a highly personal and intuitive service, and this can be developed further in the form of financial assistants to helps advice and make financial decisions, such as whether to buy or sell stock.
Predictive analytics – this works by using large volumes of data to discover patterns and insight, which in turn essentially tells a business what is likely to happen next, enabling that business to improve sales, recruitment and many other areas of business operations. For example, late payment is one of the biggest issues faced by small businesses in the UK, with the average time for an invoice to be paid standing at 72 days. Predictive analysis can look at credit performance and advise on whether a customer is likely to pay on time and what measures could be taken to address or prevent late payment.
Those examples are really just the tip of the iceberg – the potential of AI is almost limitless. Data is power for a business, and AI is the most effective way of unlocking that. It will be particularly influential with smaller businesses, which lack the time and resources to manage data. Using AI techniques can have a real impact on a small business, delivering all manner of innovative insight and services, and levelling the playing field with other bigger and better-resourced businesses.