Being connected via modern technology is something that’s becoming an expectation among consumers. From groceries to home buying, back-to-school shopping and more, there doesn’t seem to be many facets of everyday life that aren’t intricately connected to help provide an enhanced experience for consumers.
One of the latest industries to start exploring in connected technologies are banks. Specifically, artificial intelligence (AI) is looking to be the technology of choice for banks. With machine learning and natural language processing at the core of AI, the amount of paths the financial industry can take with it are endless.
AI FinTech company Douugh’s CEO Andy Taylor shared his thoughts with PYMNTS on how this technology in particular is going to affect the industry that touches all others – banking. “AI will fundamentally dismantle and transform many industries, none more so than banking,” Taylor said. “AI can enable banks to deliver a more personal, engaging and richer customer experience that replaces the physical world of branches into a digital world that becomes proactive and personalized in the way it forges relationships with customers, custom-building solutions for them.”
Though AI is probably going to be something incorporated into banking systems moving forward, in some capacity, Taylor warned that “banks need to rethink their business model in order to fully embrace AI, as it requires them to think and act like an open platform.”
Having a malleable thought process when it comes to transforming an industry is something that banks will probably need in order to capture one of the arguably most influential up-and-coming group of consumers in the United States. As more millennials become adults and baby boomers pass on, these young adults will have larger purchasing power. Just last year, Pew Research Center’s research, which included data from the U.S. Census, shared that the number of millennials (75.4 million) had surpassed that of baby boomers (74.9 million). By the year 2050, the number of baby boomers will fall to 16.6 million.
Given these figures, and varying degrees of purchasing power, and interest in trying out new technologies in everyday settings, millennials seem to have the upper hand. “Millennials especially want to use technology that empowers them to better manage their lives,” Taylor said. “They crave automation, transparency, and personalization. They demand smart technology that can take on more tasks so they get more time to focus on the things they want to work on.”
As it turns out, millennials are also the group that would most benefit from having more technology embedded into their banks. On average, millennials spend four hours a week on their finances, causing a tremendous amount of stress, according to a Bank of America Merrill Lynch study. Meanwhile, a PricewaterhouseCoopers study found that 34 percent of millennials are unsatisfied with their financial standing, while 18 percent have zero satisfaction in this regard. Giving this age group a way to streamline their finances may also have an effect on physical well-being, as 68 percent of millennials who are stressing about money say it’s affecting their health.
It doesn’t help that 70 percent of millennials currently have low expectations for banking assistance beyond the standard transaction offerings, and the same percent cannot remember the last time they set foot in a bank, according to Douugh’s shared research. As such, the move to integrate more technology into everyday banking efforts will help manage the financial health for today’s millennial and hopefully enable future generations to enjoy the same level of comfort as the baby boomer age group.
In AI news this week, AI tech startup ThoughtSpot shared news that it had completed its $120-million round of funding with the final $60 million piece. Through this funding, ThoughSypot is hoping to expand its capabilities with new innovations.
As AI makes its way into the banking industry, it’s going to help in similar ways it already has in the retail industry. Through fraud detection, banking chatbots and algorithmic trading, artificial intelligence is turning out to be more than just another random piece of technology. With its ability to transform the banking industry becoming more apparent as time presses on, it’s likely that we’ll continue to see it become more ingrained in not just financial services but in every other aspect of daily consumer life.