Driving Personalization in Banking through AI
By: Varun Goswami
Digital has slowly but surely swept into the banking space. Emerging technologies are changing the customer experience for the better, but with digital banking, there are fewer opportunities for face-to-face interactions with customers, which was previously a pre-requisite for building banking relationships.
Personalization is the Key!
In the era of digital, when human interaction is on the fading path, banks must start using artificial intelligence (AI) to leverage big data to offer personalized services to customers based on their online buying behaviors and patterns.
Customers nowadays are looking for a more personalized experience and expect to transact with banks from the convenience of their homes, or wherever they are. In short, customers need banking on the go. In order to stay ahead of the curve, financial institutions must harness the potential of existing data to create predictive and relevant insights for customers.
How can AI Enhance Personalization in Banking?
Personalization is not just a buzzword. Data suggests that enterprises that offer personalized services achieve far better business outcomes. Delivering the right individual experience through the right channel at the right time can make banking more personalized. AI can play a crucial role in helping banks understand customer behavior by leveraging transactional and other data sources.
Let’s have a look at how banks can leverage AI to create a personalized experience:
- By creating individual social ratings
AI can categorize prospects based on financial capability, family size, etc. and offer tailored products. It can also detect and analyze spending patterns and help banks position their products and services accordingly.
- By diving deeper into customer information
AI can enable a higher degree of personalization and customization by tapping into information such as customer behavior, social interaction, and even health or important event dates—all to create a well-rounded picture of their customers’ profile.
- By providing new insights and perspectives
AI helps in automatically detecting if a customer has viewed a specific offering on their mobile device and as a response, sending a personalized greeting to the customer—making the customer feel seen and catered to.
- By building an emotional connect
AI can deliver real-time emotional intelligence feedback based on the emotional quotient and can build a strong rapport with customers. Furthermore, it can also modify the way customers interact with the web and mobile applications of a bank, by mapping the customer journey from an emotionally informed perspective.
The Big Benefits of AI
By automating their processes with AI, banks can reap several benefits. For instance, AI can help reduce credit card frauds by detecting anomalies in spending patterns and analyzing client behavior, thereby making customers feel more. AI also helps in increasing the operational efficiency of financial institutions which can translate into greater profitability.
Further, it can help customer service employees by delegating basic tasks, such as updating personal details, to chatbots and leaving the more complex problems to humans. Financial organizations can utilize interactions with prospects and offer improved financial advice—and even further, in the process banks can capture additional lifestyle data to offer tailored products and services.
Real-time, digital customer experiences can add value to the bank as well as the customer. If banks are able to collect and harness data, provided by these technologies, to personalize their offers and services, it can go a long way in increasing their brand loyalty and encouraging repeat business. Financial organizations that are able to deliver true end-to-end personalization enjoy a significant competitive advantage, and implementing AI seems to be the way to get there.
(Disclaimer: Global Head – New Products COE, Newgen Software and the views expressed in this article are his own and may not necessarily be those of the publication)