Banks are banking on AI to get to know their human customers better

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In the next stage of artificial intelligence adoption, banks will use AI to help understand the intentions and emotions of customers and enable better interactions, according to a new report from Accenture.

According to the report, Accenture Banking Technology Vision 2017, more than three-quarters (78%) of bankers believe that AI will enable simpler user interfaces that will help banks create a more human-like customer experience. In addition, four out of five respondents (79%) believe that AI will revolutionize the way banks gather information and interact with customers, and three-quarters (76%) believe that within three years, banks will deploy AI as their primary method for interacting with customers.

“Consumers’ diverse needs and priorities are forcing financial services firms to redefine how they interact with them to determine the best products and services to meet individuals’ needs,” said Alan McIntyre, a senior managing director at Accenture and head of the company’s Banking practice. “AI-enabled tools can help banks identify consumer preferences and empower their workforces to react with insight and emotional intelligence, which is essential for the development of meaningful consumer relationships. The challenge will be how quickly banks can implement these new technologies, many of which are not compatible with their existing IT infrastructure.”

The theme of this year’s report, “Technology for People,” is a call to action for bank executives to design technology to help align their products and services with what consumers want in near real-time. In traditional banks, basic transactions continue to migrate from physical to digital channels, leading to major changes as banks redesign their branch networks and enhance their digital footprint. Four out of five bankers surveyed (80%) expect AI to accelerate technology adoption throughout the organization, providing their employees with the tools and resources to better serve consumers.

When asked to identify the top three reasons for embedding AI into user interfaces, respondents most often cited “to gain data analysis and insights” (60%), “increase productivity” (59%) and “cost benefit savings” (54%). At the same time, the bankers acknowledged challenges to implementing AI, citing privacy issues (38%), compatibility issues with the current IT structure (36%) and the fact that users often prefer human interactions (33%).

As with previous Technology Vision reports, Technology Vision 2017 is structured around key trends informed by the research.  The five trends identified in Technology Vision 2017 are: “AI Is the New UI (Experience Above All),” “Ecosystem Power Plays (Beyond Platforms),” “Workforce Marketplace (Invent Your Future),” “Design for Humans (Inspire New Behaviors)” and “The Unchartered (Invent New Industries, Set New Standards).”

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Click for the big picture. Source: Accenture

The “Design for Humans” trend indicates that the key to increasing the quality of customer experience lies in the ability to adapt for unique customer behaviors. The report finds that while human contact is diminishing in terms of volume, the quality and importance of human touch points will increase. For instance, one-third (34%) of the bankers surveyed said they plan to use a detailed understanding of human behavior to guide new customer experiences. And while nearly nine in 10 bankers (89%) said they believe that their customers are satisfied with their bank’s use of personalization, two-thirds (67%) claim they struggle to understand their customers’ needs and goals.

“Bankers believe that participating in ecosystems will provide a variety of benefits — including improved customer satisfaction, increased speed and agility in developing solutions, and access to new customers,” McIntyre said. “However, they will also need to develop a strategy to protect their brand positioning and to deepen their own relationships with customers.  More than one-third of the bankers we surveyed believe that participating in ecosystems will also increase their exposure to cyber security threats.”

As reported in the “Ecosystem Power Plays” trend, banks are increasingly integrating their core functions with digital ecosystem platforms in an effort to manage more broad-based consumer relationships. Nearly all bankers surveyed (98%) said they believe that it is ‘somewhat’ or ‘very’ critical to adopt a platform-based business model and engage in ecosystems with digital partners, with one-quarter (25%) of respondents saying that their organizations are already taking aggressive steps to participate in ecosystems.

Many banks are already giving authorized third-parties access to account data and aggregated card profiles to benefit customers. Banks recognize that it is critical to participate in these ecosystems, but it comes at a cost. Three-quarters (76%) of respondents said that participating in these ecosystems would require giving up control in favor of an overall better outcome — such as speed, agility and access to new customers — and that same number believe that chosen partners and ecosystems will help determine their bank’s competitive advantage moving forward.

The report draws on the analysis of an advisory board of more than two dozen individuals, interviews with technology luminaries and industry experts, and results of a survey of more than 600 bankers.

A full copy of the report can be accessed here.

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