The Top 3 Ways AI Is Transforming Financial Services Organizations

3 min read

September 13, 2023

Just as quickly as artificial intelligence (AI) and machine learning (ML) are advancing, the banking, financial services, and insurance industry (BFSI) is leveraging the technology to increase efficiency, minimize risk, and improve the customer experience. Fifty-eight percent of financial leaders believe AI is vital to their company’s future success – a 49% increase from 2022, according to the 2023 State of AI in Financial Services.

The boom of financial technology (fintech) companies, coupled with the digital transformation of banking and the exponential increase of associated data, has led to the immense growth of AI within the financial sector.

Artificial intelligence in the BFSI market was valued at $20 billion in 2022 and is expected to exceed $100 billion by 2032, with the customer service segment projected to be valued at $60 billion.

AI has many applications for financial services institutions, which rely on complex, heavily regulated, and time-sensitive processes to manage money. Two top use cases for AI in financial services from the State of AI report include:

  • Natural language processing/language learning models: 26%
  • Fraud detection: 22%

BFSI institutions are already leveraging sophisticated technology in their infrastructure, but the future of AI has the potential to revolutionize the industry. Integrating AI into critical systems such as contact centers and communications platforms will transform financial organizations’ operations by making them more efficient and user-friendly.

Here are the top three ways AI and ML technology are changing the BFSI industry in 2023.

Increasing Operational Efficiency

Financial services institutions can apply AI to automate and streamline their operations, reducing costs and improving efficiency, consistency, and accuracy.

Core financial tasks such as data entry, document processing, and account reconciliation are often repetitive and time-consuming for human employees but are well-suited to automation. For example, AI can process tens of thousands of credit agreements without any loan-servicing mistakes in mere seconds – something that previously took teams of accountants hundreds of thousands of hours.

By integrating AI with their communications systems, BFSI institutions can send automated, customized reminders or offers to their customers without relying on human agents to constantly monitor the market. If a client has used their bank’s virtual assistant to get information about home loans, an AI program can send them personalized emails with updates about interest rate trends and notify them when it’s the best time to buy.

AI reduces risk for financial services organizations by ensuring compliance, identifying potential threats, and improving fraud detection. AI algorithms monitor large volumes of financial data in real-time to identify activity and anomalies that could present threats, using ML to learn patterns to enhance risk management.

Repetitive processes are time-consuming, costly, and create opportunities for human error. Using AI automation, financial organizations can redirect their workforce to focus on higher-value, customer-centric tasks.

Improving Customer Experiences

AI and ML are already ingrained in financial customer service, making each interaction more personalized and satisfying. Forty-six percent of financial leaders say AI has improved their customer experience, found the State of AI survey.

As AI- and ML-powered virtual assistants become more advanced, they can handle everything from simple requests to more complicated recommendations. Predictive analytics and next-best-action capabilities enable financial organizations to provide proactive customer support, addressing issues before they become a problem.

Contact centers with AI chatbots provide personalized 24/7 customer support, answering routine questions and promptly resolving basic problems. If the user has a more complex request, the system can bring in a human agent, providing context and suggestions to help them handle the case effectively.

Financial institutions can also use AI assistants to provide personalized financial planning recommendations based on customers’ goals, risk tolerance, and financial situation. Leveraging ML and predictive analytics, AI can analyze individual financial data, market trends, and historical performance to recommend portfolio optimization and financial planning advice.

Modern financial clients expect personalized, omnichannel customer service, or they’ll take their business elsewhere. AI technology enables BFSI organizations to provide clients with experiences tailored to their unique situations and needs.

Enhancing Decision-Making

BFSI institutions can use AI to improve decision-making, from identifying investment opportunities to reducing bias in creating accounts or awarding loans. Equitable, informed, data-driven decisions benefit everyone, from financial organizations to clients.

In the financial industry, seconds can mean the difference between making money and losing out. AI-powered predictive analytics develop models for algorithmic trading and execute market-making decisions within milliseconds.

Using AI technology, organizations can analyze large volumes of financial data quickly and accurately to find valuable financial insights and drive business growth. By leveraging advanced analytics techniques, AI can identify trends, predict customer behavior, optimize pricing strategies, and identify new market opportunities.

Furthermore, AI can analyze data to increase the accuracy of credit scoring and reduce the risk of bias in financial services. Using cash-flow analysis based on a customer’s bank balance over time, rather than traditional credit models, AI can remove levels of discrimination from processes like underwriting.

Integrating AI into fintech systems like digital customer portals and contact center platforms gives clients greater control over their finances, empowering them to make informed decisions about their money.

AI is revolutionizing how BSFI institutions function with increased operational efficiency, personalized customer experiences, and improved decision-making. Automation, virtual assistants, and predictive analytics are just a few examples of how intelligent fintech will enhance the future of money management.

AI-Powered Financial Communications with Mitel

Mitel is transforming the financial services customer experience with AI-enhanced contact center features.

Mitel Virtual Agent integrates self-service experiences into the contact center platform with a voice/chatbot that tailors interactions to a customer’s unique needs. Clients can start conversing with the bot from any device and receive an immediate, conversational response. The virtual agent handles basic interactions, transferring customers to a human representative with interaction history when needed.

When customers need to interact with live agents, Mitel Agent Assist (AI and ML technology) monitors customer interactions. It suggests responses in the agent desktop so staff can provide informed, personalized, and compliant recommendations.

Learn how to revolutionize your financial services organization with Mitel’s AI-powered collaboration, communications, and contact center solutions.

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