Financial institutions today face numerous challenges—everything from intense regulatory pressures to upstarts coming at them from every direction with disruptive technology solutions—that threaten even their core businesses.
The concerns of the industry may be several, and may vary significantly from market to market in terms of both type and severity, but there are three especially that expose the conflicting business imperatives that beset financial services organizations today:
- The digital and branch experiences are merging. While customers are increasingly global and mobile, they expect transparent, intuitive, and consistent service anytime, anywhere. This means today’s leading financial institutions must find ways to better understand their customers and efficiently expand services if they want to be industry leaders tomorrow.
According to a 2015 Capgemini report, 65% of affluent individuals will leave their current wealth management firm if an integrated channel experience is not provided.
- Trust is returning—but is still relatively low. Due to the global financial crisis of 2007 and 2008, financial services organizations are experiencing a significant trust gap. Because trust is the foundation of long-term customer value, leading financial institutions must return to their roots by privileging personal relationships to earn back trust.
Per the 2016 Edelman Trust Barometer, from 2012 to 2016, global trust in financial services has risen by 8% to 51%—the largest increase of any industry surveyed—but it remains the lowest overall.
- Innovation and agility have become imperatives. As competitive pressures increase and technology cycles accelerate, financial institutions need to rapidly enter new markets, engage new customers, and develop new business models. To do so, legacy technology must be transformed and integrated thoughtfully to avoid incurring costly technical debt.
In the U.S., 23.5 million households were unbanked or underbanked in 2015 (FDIC), while a staggering 2 billion adults globally were found to be unbanked in 2014 (World Bank).
AI or artificial intelligence—what we like to call augmented intelligence—promises to make it possible for financial services organizations to respond to these imperatives, and with unexpected efficiency and agility.
Imagine what it would mean if your financial services organization could:
- Engage customers without increasing costs?
- Reestablish trust through personal interactions—and to do so at scale?
- Drive innovation with more confidence and less risk?
The emerging world of AI will allow you, in a very real sense, to have it both ways and produce significant breakthroughs with new business models and services. What that future looks like is up to you; how you get there is where we come in.
Article originally by: Roy Sharples, Director of Digital Transformation Marketing at Microsoft & Fred Warren, Director of Connected Digital Services at Microsoft.