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Financial services blog by shamayun miah

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Robots. Thinking machines. Trusted exchanges of anything.
Automated everything. This is the new reality of the Financial
Services industry. Today, the global banking industry faces a
rebirth by necessity that is challenging traditional operating,
workforce and leadership models, as well as inviting
tremendous opportunity. PSD2, and its arrival in 2018, will
further fuel the tension between opportunity and disruption, as
fintechs and tech incumbents muscle in on the ownership of
banks’ customer data, and offer broader choices to consumers,
reinventing the financial customer journey.

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Financial services blog by shamayun miah

  1. 1. Artificial Intelligence: Unlocking Value in Financial Services Author: Shamayun Miah
  2. 2. 2 Robots. Thinking machines. Trusted exchanges of anything. Automated everything. This is the new reality of the Financial Services industry. Today, the global banking industry faces a rebirth by necessity that is challenging traditional operating, workforce and leadership models, as well as inviting tremendous opportunity. PSD2, and its arrival in 2018, will further fuel the tension between opportunity and disruption, as fintechs and tech incumbents muscle in on the ownership of banks’ customer data, and offer broader choices to consumers, reinventing the financial customer journey. We have shifted from a coded world where systems were programmed, to a cognitive world in which systems learn, analyze, predict and adapt. Financial institutions now need to build a bold ‘post PSD2’ future, focused on ecosystems, new engagement models, disruptive digital technologies and quintessential consumer experiences. Artificial Intelligence: Unlocking Value in Financial Services
  3. 3. 3 Intelligent Systems: Augmenting Human Efficiency
  4. 4. 4 Today, consumers are greeted with an array of elevated experiences forged through automation, robotics and artificial intelligence (AI). What began as a shift in delighting consumers more than a decade ago with the inception of online and mobile banking, is now radically transforming into an individualized and personalized set of experiences. Through a convergence of digital, physical and artificial intelligence, this shift is revolutionizing the ‘human-machine engagement’. One such example: chatbots. Using natural language, visual recognition and even tone analyzers, chatbots are becoming a banking norm. Gone are the days when chatbots provided binary, simple Q&A-based responses, lacking emotional intelligence, cultural understanding and cognitive responses. These interactions are now less challenging and deliver accurate, relevant, quick resolutions for the consumer and employee queries in half the time. Traditionally, hand-offs between chatbots and humans most often led to displaced anger and dissatisfaction. Today’s exchanges are multidimensional and interactive, progressing to the point where actions can be taken by chatbots on behalf of humans. As a result, a new hybrid ‘digital-human’ workforce is being created. Artificial Intelligence: Unlocking Value in Financial Services
  5. 5. 5 This hybrid digital workforce is proving to be incredibly effective. It’s estimated that about 50 percent of workforce time within Banking and Insurance is devoted to collecting and processing data. By automating tasks — associated with things like mortgage applications, loan fulfillment, and even underwriting —  a huge amount of inconsistencies in processing can be eliminated. Further, the speed of pre-approvals can be enhanced, and processing incongruences associated with human bias that has traditionally plagued underserved borrowers trying to access affordable capital can be avoided. To deliver the next wave of benefits of automation and advance the hybrid workforce, financial institutions (FIs) are starting to adopt augmented intelligence. FIs are using augmented intelligence for decision making and advisory services, in the form of digital advisors. These augmented, digital advisors provide FI employees and consumers with faster, consistent and accurate information, using embedded evidence, probability and real-time risk assessment. Artificial Intelligence: Unlocking Value in Financial Services Verification of a customer can now go beyond answering questions, like: date of birth, mother’s maiden name, or city of birth. By tapping into multidimensional data and using the power of quantum computing, higher levels of confidence can be reached not only in user verification, but in all levels of decision making. As an example, a leading French bank has deployed augmented advisors to 5,000 branches and more than 20,000 agents, ingesting an average of 52,000 documents per second. Another French FI uses augmented advisors to analyze and sort approximately 350,000 emails per day, prioritizing them based on level of urgency and importance. And, then there’s Japan’s humanoid ‘Pepper robot’ that provides customer service in more than 140 Softbank Mobile stores across the country. These changes are being made in highly secure computing environments, respecting data privacy and consumer preferences.
  6. 6. 6 Fintechs: Critical Partners
  7. 7. 7 The constant changes in financial regulation and mandated compliance reporting, combined with cost pressures, consumer demands for innovation and heightened competition has led FIs to partner with fintechs. In many cases, these changes have even led to the purchases or investments in fintechs themselves. These new market entrants bring with them digitally-based processes and business operating models, as well as AI-led digital platforms. Add to this the use of Blockchain technologies, and the cost of serving a customer in the near future will be a fraction of the cost compared to traditional approaches today. At the same time, this provides a greater level of visibility, accuracy and accountability. Such technological advances and deepened market competition have led the top five major FIs to form innovative partnerships with startups and fintechs. It is evident that the increased competition, the opening of borders, fintech emergence, and integrated digital technologies have given consumers more choice and power than ever before. Artificial Intelligence: Unlocking Value in Financial Services
  8. 8. 8 Invest in Frictionless Innovation
  9. 9. 9 It is important to understand that automation, cloud-based platforms and AI are not packaged applications that operate in a plug-and-play mode. The integration of these emerging technologies requires high-level expertise, industry consulting, security knowledge and technical prowess, in order to build, integrate, maintain and evolve. Despite the large number of FIs who have established partnerships with fintechs, as well as adopted new digital platforms, many have not been able to realize the real value these technologies can bring, fundamentally due to three reasons: Artificial Intelligence: Unlocking Value in Financial Services Inability to successfully integrate the various technological components, architecture, software and cloud services into desirable consumer experience valued by end users. 1. Failure to create new operating models based on these advanced technologies where new digital processes are created using an innovation-centric and not legacy- based mindset. 2. Lack on in-house IT capabilities and skills to successfully adopt and embrace these technologies, with 80 percent of banks’ IT personnel typically focused on ‘keeping the lights on’, maintaining applications and making incremental changes. 3.
  10. 10. 10 Leveling the Competitive Landscape
  11. 11. 11 Automation, robotics and artificial intelligence are having a profound impact on the Financial Services industry, competition and customer expectations. Fintechs must be allowed to comply and work in partnership with regulatory bodies without hindering innovation and competitiveness — or driving heightened costs and limiting consumer choice. Those that take advantage of innovative business models, emerging technologies, new skills, and are successful in establishing and maintaining trust with consumers and partners, will have a monumental opportunity to capture borderless market share. Artificial Intelligence: Unlocking Value in Financial Services of operations executives surveyed report that increasing automation will have a positive impact on operational efficiency. 76% Of operations executives surveyed say intelligent machines will meaningfully impact their business performance in the next three years. 75% of operations executives surveyed expect intelligent machines to lead to higher value work for employees. 70%
  12. 12. Author: Shamayun Miah This article does not represent the thoughts, intentions, plans or strategies of my employer, It is solely my personal opinion. The article does not represent the views of people, institutions, or organisations that the author may or may not be associated with in professional or personal capacity, unless explicitly stated. All content provided on this article is for informational purposes only. The owner of this article makes no representations as to the accuracy or completeness of any information, data on this article or found by following any link on this article. The author will not be liable for any errors or omissions in this article, information, data, nor for the availability of this information. The author will not be liable for any losses, injuries, or damages from the display or use of this article. @shamayunm www.linkedin.com/in/shamayunmiah

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