AI improves our banking experience, but will it replace humans?

Artificial Intelligence has come a long way since Optical Character Recognition and 'show pop up if visitors spend more than 10 seconds on a page.' Today's AI technology is evolving at such a rapid pace that we don't even recognise its presence. For example, so many of us take it for granted that our phones can show us the closest ATMs whether we're in a crowded city centre or an hour out of Geelong. Even though we're aware of the advancements in the AI space, it's become, ironically, a natural part of our everyday lives.

In business, AI has transformed operations and customer service. Companies usually look for AI to optimise their current processes and maximise revenues. Those two simple goals translate into multiple, efficiency-boosting software and features. Consider a CRM, for instance. The software helps you manage customer relationships. Sprinkle some AI in there, and it can do way more. Salespeople can identify leads that are highly likely to convert, find appropriate content for potential clients looking for specific solutions, and even assess the best times to call or email a client. All of these little insights go a long way in strengthening relationships and eliminating hours of manual analysis. Zoho's own sales people say that AI is like a booster pack in their CRM.

That's not to say AI is exclusively for IT salespeople. As I mentioned earlier, AI is now sneaking into every facet of our lives. When was the last time you went to a bank to withdraw cash?

It's been a while, yeah? I haven't been to a bank since I opened an account; nowadays, you don't even need to go to the bank to do that. The reason—you can get excellent customer service just by calling them up. You can also get quick answers and personalised suggestions based on your current financial situation. Some banks go further and do all this online, too, so if you're like me and hate calling people up, you can just fill up forms on their website and get things rolling.

Most of that customer interaction is AI-enabled.

Banks use AI all the time. Not only because it's more efficient and quick, but also because they don't have the demand for a person to sit behind a desk and address a queue of customers. A large part of today's working population is tech-savvy. Banking is now one of the many things we can do on the phone. Why would we go out of our way to go to the bank where there's probably a waiting line? Honestly, if I had to wait, I'd rather do that on the phone while I make lunch or bite into an avo toast. This simple reasoning for convenience has fuelled AI in the banking industry.

The role of Artificial Intelligence in banking

Customer service

The most common use of AI in the banking sector is in the front office and administration processes. With competent IVR systems, instant chatbots on the web, and personal financial recommendations, AI is now well integrated into our banks to make sure customers have a hassle-free experience.

Authorisation

To access your finances, you go through stringent vetting processes that make sure you are who you claim to be. Banks have strict Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. To help them adhere to these guidelines, banks use AI-powered systems like biometric scanners, secure online signatures, and voice recognition. These technologies help banks prevent fraud and identity theft while also fulfilling their legal obligations.

Sentiment analysis and agent allocation

A key part of engaging with clients is knowing their current thought process. When you understand why a customer is estranged and what you can do to help, your response is more streamlined and helpful. Banks use AI technology to identify how customers feel when they call or email them so that they can allocate agents who are experienced at handling such situations.

You wouldn't want a trainee speaking to a business owner who's just been threatened with a ransomware attack. You'd want an experienced agent who can assure the customer and advise them to involve the Australian Cyber Security Centre.

Helpful prompts and next best offers (NBO)

When you're on call with a bank's representative, they can pull up information that answers most of your questions. Whether you want to discuss your savings options, credit card bills, investment portfolio, or just change the address on file, it often seems like the agent on the other side efficiently addresses your concerns. Not without AI, though.

For example, if you call a bank, they'll likely be using a voice recognition system that can verify your information, observe what you're asking for, and immediately prompt the banker with the relevant documentation. If you send an email, instead, in-built AI technology in a helpdesk system can cross-verify your details from the CRM, scan keywords in your email to determine what you're looking for, and suggest relevant material that the bank's support agent can send you. This process reduces the time it takes for an agent to manually search through hundreds of documents to find the most helpful one. AI in this situation is particularly helpful because if you're asking about car insurance, a search term would bring all the documents addressing various cars and insurance. On the flip side, the AI can filter through those car insurance files to bring up only the ones that match your profile closely.

Will AI replace humans in banking?

If AI can do such a great job of personalising customer interaction and verification, it begs the question—will it replace humans?

We don't think so. Mainly because humans design AI to make their work easier, not to make themselves obsolete. Having AI-powered front office systems is great for business, but we'll still need living, breathing humans to connect emotionally with clients. Customer relationships are essentially human relationships.

More importantly, though, AI has other, useful applications.

Automates tedious tasks

Underwriting is one of the most time-consuming processes banks go through. If you're applying for a loan, although most of the initial steps are managed through an automated underwriting software, once the software approves your application, a human underwriter manually verifies every document you submitted. While the software calculates that your annual salary is stable and good enough for you to repay the loan, the underwriter checks that the payslips you've submitted match with your bank deposits and your tax returns. AI, however, speeds up this cross-verification because it can automatically analyse multiple documents and large data sets. AI identifies patterns in your data to confirm that your application is valid. This saves a lot of time for the underwriter who can use this AI-powered analysis to sign off on your loan quickly.

Simplifies business analysis

A bank is a business like any other. They have revenue figures and goals, too. With an AI-powered CRM, agents can track their performance throughout the year and get instant updates of anything out of the ordinary. Anomaly detection is a key part of AI technology which makes it a great complement to any job function that involves rigorous and periodic reporting. For example, if one of your agents is falling short of their quarterly or monthly goals, the system can notify them and their manager, along with suggestions to get things back on track.

AI needs humans

AI is great at working with data, but it's not so great at working with humans. An AI-powered system will look at a couple's home loan application and notice that even though both earn handsomely, one of them has only a couple of months left in their contracted job. It might reject the application just because one person can't repay the loan by themselves. However, it takes a human to understand the terms of the contract and assess the possibility of them securing an extension or a higher-paying contract elsewhere. AI can't do that analysis because it doesn't have the data readily available, whereas the human has the means to verify the person's employment history and make a sensible decision.

Regardless of industry and business size, any AI needs input from humans who can intervene before it makes an in-human and illogical decision. That's why we believe AI will work alongside humans in banks and won't replace them.

Have you seen banks using AI in other interesting ways? Share with us in the comments below!

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