Customers now anticipate flawless, seamless, and relevant interactions from every business they engage with, including their bank. To stay abreast of evolving consumer expectations and the increasing competition from digital-only competitors, banks must adopt new technologies such as artificial intelligence (AI).
According to a significant 77% of banks, leveraging AI will be the determining factor between success and failure in the lending industry. By integrating AI into their operations, banks not only enhance customer experience but also improve operational efficiency and reduce losses. It is imperative for banks to seize this opportunity.
Vivek Vinod, Senior Vice President of Decision Analytics at EXL, emphasizes that banks without a strategic execution plan risk losing market share to competitors who are embracing AI technology, from challenger startups to major international banks.
Applications of High-Value AI
When implementing AI solutions, banks need to prioritize which processes to automate and focus on deploying AI use cases that offer the most significant benefits to their organization. Risk analysis and management emerge as critical areas where AI can have a substantial impact.
Vinod highlights that AI has the capability to analyze vast amounts of data and detect patterns at a granular level that would be challenging for humans to achieve. Assessing default probabilities during underwriting processes and continuously evaluating risks based on internal and external client activities are crucial from a risk management standpoint.
A lender’s ability to differentiate itself lies in the accuracy of risk assessment at the client or portfolio level and the proactive response to mitigate risks. By making data-driven loan and credit decisions based on real-time, highly precise information, AI can enhance accuracy and enable banks to better cater to their customers.
Moreover, banks are leveraging AI to extract valuable insights and relevant information from unstructured and extensive datasets. For instance, some banks utilize EXL to extract insights from diverse customer communication channels like audio recordings, online chats, emails, and handwritten notes.
One of the key insights that banks can derive from customer interactions is sentiment analysis and issue identification. AI plays a pivotal role in precisely identifying the root cause of complaints, ensuring timely resolution, and establishing a feedback loop to address underlying issues effectively.
Apart from extracting insights, AI can also autonomously handle customer interactions. With a significant percentage of financial services professionals considering the adoption of AI for advanced AI and digital assistant capabilities, customer relationship management presents a significant opportunity for AI integration in banking. Additionally, AI can be instrumental in fraud prevention, detection, and reporting processes, among other use cases.
Enhancing Data Infrastructure
While banks may be eager to leverage AI capabilities comprehensively, rushing into implementation is ill-advised. To maximize the benefits of relational AI and other AI forms, banks must possess a robust data infrastructure and effective enterprise-wide data management practices.
Vinod stresses the importance of banks designing, adjusting, and constructing a high-quality, interconnected data infrastructure that incorporates both internal (structured and unstructured) and third-party data for AI applications.
A robust data foundation is particularly crucial in various aspects. By focusing on establishing a comprehensive, end-to-end data architecture, robust data engineering capabilities, and effective data governance practices, banks can effectively manage data for AI applications with the support of the right technology partner. Continuous employee training also plays a vital role in ensuring that AI-powered solutions are utilized to their maximum potential.
Embracing AI for Future Success
Banks that have yet to implement an AI strategy not only miss out on the benefits AI offers but also risk falling behind competitors who have already embraced this transformative technology. Given the rapid evolution of the AI landscape, businesses need reliable partners to leverage AI effectively for their future growth and success.
EXL assists financial institutions in revolutionizing their data-driven processes. Discover how EXL can empower your business today.
