By Jennifer Silva, Account Associate at York Public Relations
With Artificial Intelligence rapidly growing in popularity, it is no surprise that it will play a larger role in the daily operations of community banks and credit unions. In fact, according to an OpenText survey of financial services professionals, most banks (80%) are highly aware of the potential benefits presented by AI. However, as financial institutions begin to incorporate AI, it’s crucial to look at the good, the bad and the ugly.
The concept of AI in community banking is to seek the potential for higher complex solutions that will generate positive ROI in different business segments. Many financial institutions are continually adapting to the latest technology innovations to enhance their current banking services while focusing on redefining the customer experience.
AI has proven to enhance banking services by incorporating different features such as chatbots, instant loan and credit decisions, predictive analytics, and data collection – to name a few.
Ultimately, it has revolutionized how financial institutions meet customer expectations. Before AI, the process to receive a loan decision, for instance, was lengthy, manual and required an in person visit to the branch. Now, customers can go through the process when it’s convenient for them rather than during traditional banking hours. They can also receive an instant decision and move more quickly through the home buying process.
AI also improves internal efficiencies. For example, customers can utilize chatbots to address simple questions rather than sit on hold for 20 minutes or more. Not only does this improve customer engagement, but it also frees up staff to handle higher-impact activities.
As community financial institutions leverage AI, there are also challenges. These challenges can range depending on each bank, but the overall cost to implement and the loss of human touch can be downsides to AI.
AI can be very expensive, especially as features evolve and become more complex. For any institution managing platforms in-house, there is a huge cost to maintain technology systems and ensure they keep up with customer expectations. Before making a major investment, financial institutions must consider their customer base. Innovation for the sake of innovation is never a safe bet.
AI has also slowly reduced the human touch. While consumers expect convenience and superior experiences, they don’t want a complete replacement of human interactions.
While AI can streamline operations, increase productivity and supercharge customer experiences, it’s important that community institutions find a way to incorporate a human touch into anything that is solely AI. For instance, it might be necessary to have an employee analyze conversations from chatbots and reach out directly to customers to ensure everything went well.
AI is increasingly used to detect fraud (a major benefit for banks!), but did you know that AI fraud is on the rise? Like any technology, AI can be used for both legitimate and fraudulent reasons, such as creating duplicate accounts, fake transactions or even generating misleading information. For any organization looking to tap into AI, it is important to double-check for any fraudulent activity and have safety measures in place.
Artificial intelligence is revolutionizing how financial institutions operate. While it can increase productivity and streamline operations, it’s essential to consider the challenges that may occur, including the bad and the ugly.
Jennifer Silva is an Account Associate at York Public Relations, a global fintech PR firm.