AI in finance: automation, chatbots, and banking
From robo-advisors, to predicative analytics, to the systematic automation of manual processes, artificial intelligence is disrupting the finance industry more each day. This disruption is a divisive topic. Excitement surrounds every advancement, but so do pleas for legislation and restrictions.
Customers value convenience, but their inertia to adopt innovation has been identified as one of the major forces slowing down fintech. Likewise, finance workers fear job displacement, but 80% believe their business is at risk from a failure to evolve. AI is a force to be reckoned with, but is it a force for good?
AI and automation: helping finance teams
Automation is patently well suited to finance. It reduces the strain that repetitive, low-value tasks put on human employees. It tackles the routine, everyday processes, freeing human finance teams up to finish their high-value work. And in doing so, it drives enormous time and cost savings. In fact, according to a 2018 report, one major British bank achieved an 80% return on investment within six months by automating time-consuming tasks.
Adding AI into the automation mix adds another level of support for employees. With access to all the data needed, AI can provide an in-depth data analysis to support finance teams with difficult decisions. In some cases, it may even be able to recommend the best course of action for finance employees to approve and enact.
AI and automation in the financial sector can also learn to recognise errors, reducing the time wasted between discovery and resolution. This means that human team members are less likely to be delayed in providing their reports and completing their work due to errors.
In the same way, artificial intelligence can identify fraud. (A practice already implemented by HSBC.) It does this by analysing patterns that might indicate fraudulent activity and flagging any concerns for human attention.
AI and chatbots: helping finance customers
Much like the support that chatbots can offer in retail interactions, they’re able to assist finance customers with simple transaction support and FAQs. Customers get a helpful, quick service at any time of the day, driving the ease and convenience of making contact.
NatWest has led the way somewhat in this function of AI chatbots for finance with Cora. Cora had been working for NatWest as a chatbot for a year already. Having successfully served over 400,000 customers, she earned some extra development into a ‘digital human’. This meant gaining a human face and making her capable of holding a two-way vocal conversation to support customers 24/7, without the queues.
But that’s not all that artificial intelligent chatbots can do. Not only can AI chatbots support consumers, they can now help them manage their money. These bots do this by analysing spending patterns and monitoring bank balance.
These chatbots help consumers save by micro saving. They automatically calculate what you can afford to put away, and transfer small amounts of money to your savings account for you every few days.
Or, if micro saving isn’t desirable, Cleo is an AI chatbot that seeks to help consumers manage their finances and budget better. It will tell you where you’re spending your money, advise on daily budgets, and remind you of upcoming bills.
AI risks and reservations
But here comes the divisiveness of artificial intelligence. We know the many ways it can help improve processes, customer experience and employee workloads, but we also know the problems.
Firstly, with AI, chatbots and automation being introduced, it can be common for human team members to experience automation anxiety. That is, the concern that they will lose their job to AI and robots. This can negatively impact the office atmosphere and lead valuable talent to jump ship. Managing this means introducing AI slowly, and reinforcing that it poses no threat to employee jobs.
Secondly, the use of chatbots can lead to the feeling that there’s a lack of the human touch in the customer support experience. This can be particularly upsetting for customers concerned about their finances, as the human touch is often needed to provide reassurance and advice. To manage this, chatbots need human representatives to support them, ready to take over an escalated chat.
Choosing the right AI for you
From financial advisor chatbots to intelligent automation, there are many AI flavours that suit the finance sector. With all the choices and options for AI support in finance, it’s important to take a reasoned and measured approach to AI.
We have all heard the buzz around artificial intelligence and its applications in finance. Now, it’s time to use AI to help customers have a better financial life, and employees have a better working life. Adopting AI isn’t about hopping on the bandwagon, but embracing the future of finance and banking, however cautiously.
Note: we originally published this article here: https://www.globalbankingandfinance.com/category/news/ai-in-finance-automation-chatbots-and-banking/