Reshaping the Customer Experience with AI in Mobile Banking

Artificial Intelligence (AI) in banking is not a new concept for today. The ability of machines to learn and accomplish tasks previously done by humans goes back decades. Availability of data, open-source software, cloud computing, faster processing speeds, and adoption of AI are contributing to the massive disruption of such an industry. One that affects almost every consumer and business alike is mobile banking. This has important implications for financial institutions as new technological capabilities and relevant mobile services can help them stay relevant in the market.

Now every week there seems to be a technological breakthrough where a new task is accomplished using AI. From Siri to Amazon's Alexa, the idea of ​​having a personal assistant to help you tackle everyday tasks is becoming more welcomed by users everywhere as consumer expectations for personalization are always at a high level. It is very easy to use AI in different ways in different industries. From less robust applications such as Apple's Siri to more complex deep learning algorithms where a machine can perform tasks similar to a human brain. Although "strong AI" is still out of our reach, we are seeing technological capabilities advance with each passing week.

Artificial Intelligence (AI)

It is easy to classify artificial intelligence as a group of related technologies including natural language processing, machine learning and expert systems. These functionalities can sense and behave in much the same way as the human brain, which has already changed the way we view the overall customer experience.

AI is divided into five broad categories by McKinsey Global Institute which are computer vision, natural language, virtual assistant, robotic process automation and advanced machine learning. The research institute estimates that by 2030, 70% of companies will have adopted at least one type of AI technologies listed above. The banking industry has generous experience leveraging data insights, but for the most part, banks have yet to build out scalable AI strategies focused on creating value for their customers.

Artificial Intelligence in Banking

While banks do not work round the clock; Users want to complete their banking transactions round the clock. For them, the best bank is the one that provides them the facility to do their transactions 24×7. This demand is easily met with mobile banking. But then comes another big question mark. Mobile banking can help users to complete banking transactions round the clock but what about customer support. This is where the need for Artificial Intelligence in banking comes into play. With the help of machine learning and predictive technology, AI is increasing the efficiency of mobile banking and helping banks to provide better experience to their users.

Remaining Relevant in Today's Mobile App Market

However, most of the banks are in the early stages of adopting AI technologies. According to a survey conducted by Narrative Science and the National Business Research Institute, 32% of financial services executives confirm that AI technologies are already being used. For example, predictive analytics, recommendation engines and voice recognition etc. In a further indication of banks' commitment to AI adoption, The Royal Bank of Canada recently added Siri functionality to its iOS mobile app. Traditional retail banking providers are now exploring AI technologies to enhance the customer experience and remain relevant in today's market.

AI functionality in mobile apps is becoming increasingly active, more personalized and holistic and more sophisticated. Just last month, Apple introduced Siri Shortcuts with the release of iOS 12. Siri now monitors user activity and suggests shortcuts based on general in-app behavior. Users can also customize this AI feature with unique voice commands and search queries to complete routine tasks. Banking institutions can augment their mobile apps with AI to send helpful reminders at times when customers have specified that they need them the most. Simplifying user tasks with sound technology will become an essential part of the user experience. Again, banks need to provide simple, yet rich AI experiences to stay relevant with mobile customers.

Personalizing the Mobile App Banking Experience

JD Power cited that 47% of Canadian retail bank customers described themselves as "digital-focused" and 32% claimed to be "digital-only" customers. In Canada, mobile apps account for 85% of total mobile time and the mobile-only audience is growing. In just one year, 5% of Canadians have left the desktop as a competitor on their list of digital devices. In other words, financial institutions need to offer both error-free mobile app experience as well as personalized functionality to maintain customer satisfaction.

Winklicks is a company that is already reinventing the way mobile banking works, incorporating financial experiences into the daily lives of its users. The company has developed several apps, including an intelligent mobile banking app that improves the financial health of consumers by encouraging positive spending, saving and borrowing habits. Intelligent banking apps can provide customers with personalized insights and recommendations whenever and wherever they want. Here are some of the main ways AI can personalize the mobile banking experience:

• Customer Help

Users are expecting the same level of personal interaction and support they are already accustomed to on services like Amazon and Netflix. Collecting data from mobile devices and using analytics and machine learning at the back end can either provide highly-relevant information to users or redirect them to the right channel without having to deal with another department. This eliminates the pain of not being able to reach the appropriate customer service representative. User queries and concerns can be answered instantly in real time.

• To Give Advice

If users can receive custom advice, offers and service based on this shared insight, they are more likely to share their personal information. Personalized communication and advice enabled by AI can be provided by robo-advisors, which are online wealth management services that generate automated, algorithm-based portfolio management advice without the aid of a human representative.

• Personal Planning

In addition to providing personalized advice using chatbots, AI can help customers plan their future events. AI-enabled mobile banking apps can provide specific strategies based on the stage of life of the users. For example, if a user is buying a home for the first time, the app can generate a budget with estimated expenses in the near future.

• Automatic Transaction

Users can automate transactions and bills as per their due dates, eliminating the tedious task of manual entries.

• Personalized Reminders

Reminding users about their current balance will help them stay within their budget. Reminders should also be set for pending bill payments and other upcoming expenses.

Mobile service companies help users track their spending and boost their savings with automated, personalized recommendations via a special debit card attached to their mobile app. Such innovative thinking allows banks to push the boundaries of what their users can offer to enhance the overall customer experience. Transforming the customer experience in banking requires speed and accuracy that traditional banking cannot deliver. The most forward-thinking financial institutions may be able to deliver value in real time.

Obstacles to Adoption

New innovations in data analytics empower financial institutions with systems that are smart enough to have the ability to learn on the go. And work on refining each algorithm as well as improving their results over time. However, the adoption of AI by its mobile strategy can naturally be complicated. An AFMA/Finacle study found that:

• 50% of banks listed their legacy systems as the biggest challenge before them.

• 44% lack of integrated vision

• 38% lack of skills and experience

While many barriers still exist and banks are slow to adopt, AI technologies are gaining momentum and have the potential to transform the industry in entirely new ways.

Going forward, financial institutions will need to align their AI and data analytics priorities with the strategic vision of their mobile apps and implement those strategies in an agile cycle of testing and learning. Continuous iteration creates an environment where vulnerable AI test cases can fail quickly and high performing applications can succeed sooner at delivering real-time value based on user feedback. Enhancing the customer experience with AI requires a detailed roadmap that identifies specific areas where AI will enrich the mobile app experience in line with the overall business objectives.

Future of Artificial Intelligence in Mobile Banking

AI in mobile banking started with transactional analytics, risk management and fraud detection. Today AI has succeeded in revolutionizing the way people bank on a daily basis. With mobile apps, banks can create consistent, high-quality touchpoints that connect their customers with solutions and products that simplify their financial lives. The world is witnessing a major shift towards privatization as machine learning is being used to enhance transactions using millions of data points.

With the ability to fully understand the behavior of their users, financial institutions are best positioned to implement AI technologies in their mobile strategy. All financial institutions will be leveraging the power of AI to deliver a better experience to their customers with lower costs, less risk and increased revenue. Banking institutions need to focus on technological advancements within the AI ​​landscape and plan ahead for the times to come. What might be recognized as "amazing" today will become commonplace in the near future, which is why it is important for banks to stay relevant in the mobile app market.