Finance firms near the moment of truth to truly embrace AI
According to Accenture research, the financial services industry is now the third most impacted by productivity gains achieved with the implementation of AI, behind only the media and telecoms, and manufacturing sectors
In today’s rapidly growing digital age, long-term survival and success are increasingly being linked with how “smart” a business can be.
And for financial services firms that means using technology to become more intelligent, and processes and systems that talk to each other and learn from one another.
Banks, insurers and wealth managers are pouring billions of dollars into artificial intelligence (AI), machine learning and other types of technologies that are already not only raising productivity levels, but reducing risk and actually creating new jobs.
According to Accenture research, the financial services industry is now the third most impacted by productivity gains achieved with the implementation of AI, behind only the media and telecoms, and manufacturing sectors.
The figures show that by 2035 its use should have resulted in an increase of US$1.2 trillion in gross value added, which measures the output value of all goods and services in a sector.
Increasingly the most complicated and time-consuming tasks – such as getting to know your clients and anti-money-laundering measures – are already being vastly improved with AI use, enabling computers at major banks or insurers to “talk” with other machines in credit checking bureaus, law enforcement databases or regulatory agencies around the world.
Controlled by strict rules and regulations, AI-driven systems are able to analyse huge volumes of data in a fraction of the time human staffers would take to digest it, potentially making connections, too, that would never be possible between client identities and asset ownership, fund transfers and political figures, for instance.
Further down the road, the AI robot, or “bot” for short, will also be better able to teach and train itself from carrying out its day-to-day work, and as patterns emerge, change how it operates.
AI will also create a myriad of new services and products for the billions of consumers that increasingly shop or bank online.
Micro-insurance, for example, has only really become economically viable since the advent of AI being able to crunch massive amounts of data and develop tailor-made policies for different individuals.
The same goes for customer services, with human agents currently being swamped by ever increasing numbers of enquiries. AI-enabled bots can handle many more of those automatically and quicker, allowing major efficiencies to be made.
The recent Singles’ Day shopping festival, organised by Alibaba Group Holding, was handling 256,000 transactions and customer requests per second at its peak – an inconceivable number without the help of AI-led technology.
In China, we’re already seeing other amazing ways, too, that AI is being used to brilliant effect.
In the insurance industry, for example, consumers involved in car accidents can snap a picture of the damage, and fill out the claim form via mobile phone apps, at the scene, quickening the whole claims process.
AI is also right at the core of the rise of the robo-adviser, now being used all over the world to automatically decide how best to rebalance and update clients’ investment portfolios, without them having to log in and make the buys or sells.
The idea that AI will eliminate human interaction altogether is fanciful, of course – but what it will do is remove inefficiency by eliminating boring jobs.
Armed with the findings of ongoing data analysis, workers will be freed from routine, mundane tasks and allowed across many industries to do other more rewarding jobs such as develop business via real direct contact with clients.
Industry experts predict overall customer satisfaction levels will rise considerably as a result, especially in the financial industry, providing much-improved long-term returns for banks, insurers, wealth managers and other finance-related firms.
Piyush Singh is managing director and lead, financial services, at Accenture Asia Pacific and Africa