With AI, Bank Customers Manage Their Finances on Their Terms

3 minute read

As AI-powered virtual agents become more capable and ubiquitous, they will allow consumers to manage their finances on their terms, not on the technology’s.

IPsoft Digital Workforce SummitConversational AI solutions such as Amelia, our industry-leading virtual agent (VA), are quickly establishing themselves as meaningful and impactful technologies within the enterprise. From a consumer point of view, these solutions are at a point of maturity where they are affecting the way that people manage their daily activities in a meaningful way – but it has taken some time to get here.

For example, text-based adventure games of the early 1980s may have allowed players to virtually “go west” or “pick up amulet,” but the hard-coded semantic interfaces would be easily confused or disrupted by anything that deviated from the strict confines of the software. These limitations meant players had to learn to relate to machines on their terms rather than vice versa.

Fast forward to today and the latest generation of AI-powered VAs allow users to speak to digital systems just as they would to another human, whether at home or increasingly at work. These intuitive user interfaces (UIs) are able to react to a wide range of human inputs, including ones they haven’t been specifically programmed to anticipate: “How much money do I have right now?” versus “How’s my savings account doing?” versus “Do I have enough in my savings to put a $3,000 down payment on a new truck?” This means users are able to interact with enterprise systems on their terms, not based on how the technology works or understands inputs. Nowhere is this technological versatility making more of an impact than in the banking industry.

Banking: The Next Generation

Use of newer technologies generally varies between generations. Defying some stereotypes, studies have shown that baby boomers overall are embracing technology including conversational AI. However, they don’t match the enthusiasm coming from the digital natives of younger generations. A recent study by eMarketer found that 34% of millennials have used a VA in the past year, while the same could only be said for only 16% of Gen-Xers and 10% of boomers. The study went on to predict that the gap would only expand in the years to come.

This trend takes on increased significance when you place it in the context of other ascendant consumer banking habits among millennials. For example, millennials are twice as likely to utilize mobile banking than boomers. Furthermore, a recent Gallup poll found that only 66% of millennials had visited a brick-and-mortar branch within the past six months as compared to 81% of boomers.

We should note that while the trends toward virtual banking are strongest among younger demographics, a survey from Accenture found that 71% of all users would use entirely computer-generated support for banking services if they could. The large banks are undoubtedly aware of another finding within this survey, which found that 40% of Generation Y (those just entering adulthood now) would do their banking with one of the major tech brands that are not even focused exclusively on banking. This openness to stepping away from established banks presents an opportunity for the new breed of digital-only “neo-banks,” which means increased competition overall.

Virtual Agents Provide More User Control

Given these findings and trends, it is not surprising that banks around the world are increasingly investing in consumer-facing AI solutions. These technologies open powerful new functionality to users – particularly younger generations. AI-powered VAs can be accessed 24/7 from multiple channels. Unlike simple chatbots, modern VAs are able to locate personalized information securely and assist users with independently resolving financial issues, without relying on a human agent and without a user ever stepping foot inside brick-and-mortar bank locations.

VAs are the optimal technology to match users’ growing preferences for virtual and independent execution of financial management tasks. In other words, AI and VAs put consumers in even greater control of managing their finances – how and when they access information, conduct transfers and process transactions. It’s this kind of personalized empowerment that will help drive even greater AI adoption among banks and financial services firms.

The potential of VAs to transform the banking industry will be one of the many discussion topics at this year’s Digital Workforce Summit (DWS) on Wednesday, May 8 in NYC. Attendees will hear presentations from top banking executives talking about their firms’ AI journeys. Confirmed speakers include decision makers from BNP Paribas and Bank of America. While it’s free to attend DWS, it is strongly recommended that attendees register to reserve a spot, which you can do by clicking the link below.

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