Other parts of this series:
Artificial intelligence (AI) is nothing new in financial services. What is new, however, is that AI is moving beyond process to interaction.
In my last post, I discussed how today’s technology can empower people with interactive tools that adapt to their needs. I also explained how today’s technology offers financial services institutions unprecedented opportunities to shape their industry and become true partners of their customers and employees.
Over the course of this series, I will highlight the five trends we identified in our Technology Vision 2017 Survey of 5,400 business and IT executives. All of these trends underscore the importance of focusing on “Technology for People” to achieve digital success. In the current post, I will take a closer look at how artificial intelligence (AI) is changing the way humans interact with technology.
The promise of artificial intelligence
Few emerging technologies are accelerating at quite the same rapid pace as AI. Made possible by the high computing power we now have at our disposal, the
accessibility of data to train and fuel AI, and other factors, AI is quickly becoming a key differentiator for financial services institutions—and becoming a core competency demanding of C-level investment and strategy.
Banks are shifting from mobile-first to AI-first
Banks have been using AI in heavily manual processes for accuracy, efficiency, speed and cost benefits. The next stage of AI, we believe, will likely consist of a move toward simpler, smarter interfaces, with machine learning used to reengineer back-office processes, and AI tools that allow better customer interactions.
More and more banks are using AI-enabled tools, such as centralized platforms/assistants or messaging bots, to enhance front-end services.
- CapitalOne® Bank, for instance, has developed a “skill” for Amazon Echo’s® Alexa that lets customers check their accounts and pay their credit card bills.
- HSBC® customers can get answers about their accounts or credit cards from the bank’s virtual assistant, Olivia.
In essence, AI in banking is shifting rapidly from mobile-first to AI-first in the customer experience, and moving staff to more judgment-based roles and to roles that create more value.
AI is becoming the new user interface of digital insurers
For most insurers, AI begins with intelligent automation in the back office. Insurers are experimenting with or deploying automated data capture and recognition, robotic process automation (RPA) and cognitive robotics as levers to improve operational efficiencies and customer experiences.
The next step will likely see carriers create AI interfaces that make complicated technologies and processes more approachable for customers, agents and employees.
- Before long, employees may direct their IT support questions to a chatbot, or their business analytics queries to a virtual assistant.
- AI may soon become invaluable for insurance agents as they try to offer their customers the best advice about the products they represent from multiple carriers. Agents and bots will likely work in partnership to optimize a quote or offer financial advice, with AI providing contextual insights. In the United States, for example, Allstate is using its virtual assistant Allstate Business Insurance Expert—or ABIe—to help agents quote and issue commercial insurance products.
On the frontline, a growing number of insurers are using AI to transform their customer- and distributor-facing channels. These carriers use AI to streamline claims, answer customer questions, and offer product advice.
- The US insurer GEICO, for instance, has launched a virtual assistant called Kate for its mobile app. Kate understands natural language and can answer basic policy questions.
- In Europe, InsurTechs like Germany’s Snapsure and the UK’s Spixii are also working with AI. The Spixii chatbot, for instance, draws on user data and contextual data from multiple sources to provide purchasing advice.
AI is building bridges with venture capital and FinTech
Finally, insurers are also entering into partnerships to create or spin off new ventures using platform technologies, and connecting with venture capital and fintech sectors.
- One prominent example is an investment in Lemonade by XL Catlin’s XL Innovate venture capital fund. Lemonade is a “born in the new” insurance company that promises to deliver instant online insurance by replacing brokers and bureaucracy with bots.
In my next post, I will continue my review of the Technology Vision 2017 trends with a look at how digital ecosystems are transforming the way financial services institutions are delivering value.