Artificial Intelligence in the banking industry is going to make consumer channel banking irrelevant.
Today’s banks have been improving channel banking with user-centric designs. There is increasing emphasis on employing aspects of artificial intelligence to engage with users in more meaningful ways. As we are witnessing this AI journey in banking, it is becoming quite predictable on how things will be in near future in channel banking space.
It starts with smart assistants backed by natural language processing. Assistants and bots are rushing to help users in doing things effortlessly on their personal devices.However, AI role is limited to help users navigate through banking tasks and reduce queues on customer care IVR. These assistants are passively present and mostly await for instructions from a user.
Next, comes analytics-driven insights. The channel banking apps, powered by deep analytics, actively initiate user engagements. The apps are able to predict upcoming and relevant banking activities and are helping users to complete them in time.
If we take a cue from these developments, it wouldn’t be very hard to visualize channel banking apps watching users, engaging with them at a time and place that is convenient to users, having meaningful conversations with users, are aware of the surroundings, providing urgent insights on-the-go and keeping away the clutter of information that is not relevant. These possibilities are just a natural progression on the path that is being laid out. And thus arises a question – will things just evolve on a path that looks so mundane for the beast that AI is?!
Consumers use channel banking apps to manage their daily finances – park money in accounts, ensure liquidity for emergencies, move surplus to high-yielding accounts, pay the dues, and send money to people. Instead of putting AI on the bank’s side and engaging with users, wouldn’t banks of the future put AI on the users’ side and set users free from these routine banking activities?
Riding on AI prowess, tomorrow’s banking systems will be managing money on behalf of their customers. They will be making decisions on behalf of users on where to park money and for how long, should an old investment be terminated and new investment started for better yields, from where to arrange money for emergencies, when to pay the dues, whether to lend money to their contacts and how to recover the money while keeping the whole transaction risk free.
The AI in banking will trigger a revolution in the bill payments area. The concept of ‘due date’ in bill payments will be remembered for the inefficiencies of the legacy systems. Banks will have systems that pay the bills, on behalf of the consumer, just-in-time the bills are generated at the billers’ end. The AI would have decided on safe payment limits and never bother users for routine bill payments. It will trigger a review with users for abnormal bills and reverse the disputed payments. Knowing the consumer’s financial habits, the system would have provisioned for upcoming bills, avoiding any defaulter situations.
Personal money transfers will be replaced with personal lending-borrowing systems. Based on borrower’s need for money and financial habits, the system will devise a repayment scheme and choose the right lender in borrower’s circle of contacts whose financial habits accommodate the repayment scheme. The system would have covered for risks and thus make the personal lending-borrowing more safe and beneficial to all parties involved, without anyone actively participating in the process.
This may sound facetious or may raise privacy and security concerns, especially when money is involved. But aren’t we talking about Artificial Intelligence which is going to set humans free from mundane tasks?! AI will not just stop at paying your bills, but it will eventually become your wealth manager.
AI in banking is going to reduce consumer channel banking to mere a chat widget and consumers would be using it just a few times in a lifetime!