How banks and customers benefit from AI

The banking sector has recently pointed to Erica, Bank of America’s virtual financial assistant, as a prominent example of how financial institutions may incorporate AI concepts into regular digital banking encounters with customers.

Because of the widespread use of Amazon Echo and similar devices in American homes, the concept of virtual assistants has gained popularity. Banks stand to benefit from this emerging trend.

BofA released Erica at a period when customers were likely already familiar with an AI-powered virtual assistant, which likely boosted uptake in the first few months after launch. Earlier this month, BofA revealed that more than 3 million mobile banking users now interact with Erica, a staggering 200 percent increase (2 million users) since the end of June.

However, future AI implementations by financial institutions will extend beyond virtual assistants. Bank executives feel that data collected through various AI programs will be critical to banks’ efforts to improve the customer experience.

For example, how can banks improve their voice banking services based on data on how clients engage with assistants like Alexa or Erica?

The Bank Customer Experience Summit, held recently in Chicago, focused on how artificial intelligence may help banks create more meaningful relationships with customers.

During the Bankers Rapid-Fire Roundtable event, which covered a wide range of challenges affecting the banking industry, Phil Leininger, general manager of omnichannel sales and service at USAA Bank, discussed the necessity of making the most of data gathered from AI efforts.

“Banks are either not using the data at all, or not using it to its full potential,” he told me.

Another panel discussion during the summit, dubbed “The Latest Buzz on Digital and AI,” focused solely on the potential impact of AI on financial institutions and their consumers.

Kader Sakkaria, director of technology, business, and portfolio management at BMO Harris Bank, explained how BMO is aiming to gain a “360 view” of its customers in order to provide the best products for each one.

“A major initiative we’ve been doing is consolidating data,” he told me. “We’re making a large investment in analytics. We are attempting to pilot some ideas to explore how we can use the data. “How can we use that data to cross-sell or upsell [individual customers]?”

Sakkaria also mentioned how BMO is using AI to help the bank become more “agile.”

Sakkaria cited BMO’s auto loan process, which presently takes about three weeks to complete because to all of the documentation. BMO aims to employ AI to make instant decisions on an application, eliminating the existing time-consuming process.

“The cultural change of being more agile is going to be significant for us,” Sakkaria told reporters.

Kristin Deegan, senior vice president of digital product management at Wells Fargo, also spoke on the panel and shared with the audience some areas of the bank where she believes AI might be useful.

She noted Wells’ “predictive banking” capability, which was launched to its mobile banking app earlier this year. It analyzes a customer’s account information to provide personalized account insights and assistance.

For example, she stated that the app can alert clients to the need to transfer funds from savings to check whether an overdraft fee is near.

“It’s proactive,” Deegan explained of the feature. “When we tested it, we had excellent feedback from people. We did the same for the [Facebook Messenger] chatbot.”

Ajit Chawla, vice president of Birlasoft, says it is still early days for banks as they seek methods to incorporate AI into their customer experiences.

“In the next two to three years, we’ll see a lot of mainstream adoption of AI,” the researcher predicted. “Right now, we’re still at the beginning. Eventually, AI will help standardize user experiences.”