Digital transformation: why banks can get ahead with IA

AI, RPA and IA – can these acronyms help your bank attract new customers and save money?

Financial institutions are going through a period of radical transformation. In the space of only a few years, emerging fintech, changing customer demands, and increased competition have changed the face of banking and finance irreversibly. We live in a digital-first society and it has impacted everything from banks’ back-end processes to how they communicate with customers.

85% of banks have adopted intelligent automation (IA) according to the recent report: The State of Automation 2019. In particular, the uptake of robotic process automation (RPA) and artificial intelligence (AI) have been instrumental in ushering in a new era of banking. The results from the report might be a surprise to some. The banking sector hasn’t been known for its innovation in the past, but this all changed when the recent fintech boom started. With it came new technology that allowed banks to offer frictionless 27/4 transactions for the first time and overhaul their approach to customer service.

Banking in a digital economy 

What drove banks – especially the large incumbents – to change? If they wanted to engage with today’s customers, banks had to rethink their approach to service delivery and marketing. A trip to the bank during working hours isn’t appealing or practical for busy customers. Especially when other banks are offering the same level of service on-the-go using mobile devices. 

Fintech has made it easier for challengers to break into the banking sector. Today, competition for customers is fierce and diverse. It recently emerged that traditional banks were losing customers to fintech companies that offer banking services. In the same report, 34% of decision-makers at UK retail banks claimed that banks who don’t offer a digital service will be gone by 2023. Forward-thinking businesses have realised that traditional methods of banking no longer suit modern lifestyles. They reacted to these industry trends by using technology to design a service that was comparable to that offered by traditional banks but far more convenient.

The impact of younger generations can’t be overlooked either. Millennials and Generation Z make up a significant portion of banks’ current and future customer base. These generations are the first to grow up with technology and they have different expectations and demands than previous generations. They are open to trying new ways of managing their finances and embrace disruptive fintech. As intelligent automation for banks becomes more widespread, even less tech-savvy customers across all generations have grown to accept modern banking methods.


Frictionless transactions anywhere, anytime

Banks’ willingness to develop online banking tools has made this service a must-have rather than a value add. According to the recent report on intelligent automation, banks have access to a “robust, flexible, and secure technology ecosystem”. If they choose to capitalise on this, they can provide secure and frictionless 24/7 transactions. Advances in the security of fintech products such as improved online encryption, has helped its mass adoption. Being able to offer customers a level of data protection that matches that of traditional banking is fundamental for convincing even the most sceptical that smart technology is the future for banking.

Banks that don’t offer mobile banking either through a mobile browser or an app, risk appearing outdated and being left behind. They may struggle to attract new customers and find it harder to retain existing ones. When some challenger banks like Monzo are completely based online, the larger incumbents have no choice but to provide customers with a robust online banking platform if they want to compete.

Two-way communication was just the start

It’s well known that AI-based technology has been disrupting the financial services sector for some time. Chatbots and intelligent data processing software are now commonly used business tools.

Most people are familiar with simple chat automation. People type a question into a website’s chatbox and a chatbot will reply with a pre-programmed response.  Recent developments in chatbot technology have made it far more sophisticated than its predecessors. It can still handle frequently asked questions, but that’s only a small part of its potential. Looking forward, it’s evident that the future for banking is conversational and banks’ ability to be innovative with IA communication tools is what will set them apart as market leaders. 

Businesses at the forefront of change within the industry are integrating chatbots with other disruptive IA technology to drive greater efficiencies for customers and their businesses. Ibby’s chatbot technology will integrate seamlessly with open banking APIs to streamline the assessment of individuals’ affordability, much needed in the process of applying for certain products and financial services. By using AI-powered chatbots for sales and support, banks can pivot their customer experience strategy away from outdated methods and show customers they understand their needs.

In the past, customers may have found applying for new banking products arduous or confusing, but now chatbots can guide them through pre-qualifier questions and immediately assess their eligibility by carrying out credit checks (once customers permit it to do so). This can be done in a conversational manner that makes complicated terminology easier to understand and less intimidating. If customers have questions mid-application, they don’t have to abandon the form to get help, they can simply ask the bot then and there. Supporting and guiding people through the application process can increase the number of completed online forms. Not only that, unsuitable applicants will be filtered out during the earlier eligibility checks and sent an automated response that’s in line with customer service guidelines.

It’s worth remembering that not all intelligent customer experience tools are automated. If customers need an advisor to assist them, support staff can use co-browsing technology to solve their issues in real-time. Co-browsing allows agents to use dual browsing software to step in and view customers’ screens. When this service is combined with live chat for financial advice, it takes customer service to the next level.

Can robotic process automation save your business money?

Intelligent automation’s potential to save businesses money is unprecedented. By 2030, Business Insider estimates that AI-enabled savings for banks will reach $447 billion. We have reached a tipping point where robotic process automation, artificial intelligence, and other forms of intelligent automation have moved from being experimental technology to mainstream business solutions.

At the moment, robotic process automation (RPA) isn’t as widely known about as its cousin AI. We are only beginning to see its transformative effect on banking. Simply put, RPA takes mundane and repetitive tasks off human hands. It’s software that can handle back-end tasks such as filing documents and retrieving invoices. It’s growing more popular in banking because it can handle internal operations accurately and efficiently, without the need to change existing systems in many cases. Banks that use RPA can give their employees more time to focus on complex tasks. The business efficiencies created by it are estimated to have: “the greatest five-year potential ROI for back-end operations” according to Business Insider.

Banks that are interested in taking advantage of the operational savings created by intelligent automation will be interested in Ibby’s powerful IA tools that will help them keep up with the pace of digital transformation within their sector.

What’s holding smaller banks back?

What about the 15% of banks that are yet to adopt intelligent automation? The report found that it was mainly smaller businesses that are falling behind when it came to adopting new technology. The top reasons given for this are: “doubts about business value, difficulty in finding the right technology partners, and inadequate budgets”. 

While larger banks have more money to trial in intelligent automation, smaller companies need to be more cautious about investing in business development. Often, they need to partner with companies that offer a full service to ensure they get the most out of their budget. Ibby’s messaging software, advanced CRM and automated chat technology will all work together to remove friction and allow banks and financial service providers of all sizes to improve internal operations and maximise results.


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