Financial Firms Ahead Of the Curve in Adopting AI, Chatbots: Study
Financial services companies are ahead of the curve in adopting Artificial Intelligence (AI) and chatbots to serve customers, according to a new report based on a sample of around 500 industry leaders.
According to the 2019 Adobe Digital Trends Report, 34% of financial services brands use AI or bots or both to drive their campaigns and experiences, compared with just 22% of respondents in other sectors; an additional 37% of financial services firms are planning to invest in the technology over the next year.
Michael Plimsoll, Industry Marketing Director for Financial Services at Adobe, said, “The high volume of transactions in financial services, coupled with unprecedented digital disruption, especially from newcomers to the sector, make the industry fertile ground for AI adoption. In a market where products can be homogeneous, we will increasingly see financial services brands use AI to differentiate their customer experiences through greater personalization, automation, and service innovation.”
Financial services companies remain highly constrained when it comes to price competition, making the customer experience their primary route to differentiation. Indeed, customer service, product innovation, and quality are collectively highlighted by nearly half (49%) of respondents as the main areas where they can set themselves apart.
CX is still the best bet for differentiation in financial services… with service excellence seen as a sweet spot
In the current macro and micro environment, the study shows customer experience (CX) improvement therefore
remains their primary route to differentiation, with companies in this sector aware that consumers are increasingly comparing the ease of interaction with experiences in other areas of their digital lives.
Around three in ten (29%) responding companies see delivering an ‘easy/fun/valuable’ CX as their main competitive weapon for the coming five years, the study says.
In terms of top digital priorities, managing user journeys (‘customer journey management’) stands out as an area of focus when compared with other industries (31% vs. 19%).
The influence of fintech upstarts continues to rub off on the establishment. CX remains the sector’s key overall priority, but within this realm, FS players are particularly focused on delighting customers by assisting them through interactions and delivering new services that are valued.
Customer service, and product innovation and quality, are key areas where FS providers are increasing focus, and collectively are highlighted by nearly half of respondents as differentiation opportunities (49% vs. 43% in
2018). FS providers are much more focused on customer service-based competition than
players in other sectors (22% vs. 13%).
Brands are now more alive to the importance of content in the mix
Beyond drawing value from data, bringing together a consistent and engaging CX invariably means having a wealth of compelling content available to provide individual users with the right messages at the right time, in the format of their choosing.
Content creation was a noticeable blind spot for FS players in 2018, but has risen up their agenda.
The proportion of respondents seeing digital content as their single most exciting opportunity
has almost doubled over the last year (from 7% to 13%), and there is now only a single percentage point gap compared to other industries.
Putting data to work, for example through personalization, is a growing priority
The fintech wave is forcing all FS providers to look beyond their one-size-fits-all customer communications of old. Data-driven marketing that focuses on the individual has risen up the agenda, highlighted as an exciting opportunity by many more respondents in FS than in other industries (24% vs. 15%). It is particularly highly valued in the scale-focused world of retail banking (35%). FS interest in using artificial intelligence (AI) to better understand and connect with customers is also well above the norm.
Data itself can only get you so far when it comes to personalized marketing. Insights need to be drawn
out and opportunities fully exploited. FS players have clearly grasped this. A majority cite analytics as a top priority for their organisation in 2019 (55% vs. 44% in other sectors).
Among FS marketers specifically, there is also widening focus on better use of data for more effective audience segmentation and targeting, with 56% citing it as a rising priority. It is not just in transactional technologies that FS
businesses are being pushed into a trail-blazing role. Personalized CX is a key focus, both in the short- and medium-term. More than a third of FS respondents see delivering personalized experiences in real time as their most exciting prospect for three years’ time (34% vs. 32% in other sectors).
Driving innovation: payment technologies and blockchain
Digital disruption has been particularly impactful in FS and is driving businesses to quickly embrace
opportunities around new technologies, wherever they sit on the development curve. Financial service providers are around twice as likely as their peers in other industries to have incorporated enhanced payment technologies (47% vs. 25%) and blockchain-based functionality (18% vs. 9%).
In the context of technology adoption, FS companies are also ahead of the curve in some areas that are less intrinsically linked to the realm of finance, such as AI/bots to drive campaigns and experiences (34% vs. 22%) and delivering personalized experiences in real time (42% vs. 39%). Providers recognize AI’s potential to solve prolonged user pain points.
The high volume of transactions seen in FS, and the huge size of many companies’ customer bases, makes it particularly fertile ground for AI in areas such as personalization, automation and service innovation. The proportion of FS players that see AI as their ‘single most exciting’ opportunity for the coming year has increased since 2018, and outweighs non-sector peers. A third of respondents are now already using AI (33%, up from 20% last year and higher than the 18% average for other industries). This high level of AI adoption compared to other sectors reflects the strength in IT and data science skills traditionally associated with financial services industries.
Anticipation around AI is particularly high in insurance, where customer trust issues are prevalent. Numerous AI-linked applications are evident in the insurance marketplace, around areas such as coverage personalization, ‘behavioral’ pricing and acceleration of claims settlement. Nearly a fifth of insurance players see AI as their ‘single most exciting’ opportunity for 2019.
The study shows this sector is also particularly closely focused on medium-term potential for IoT, where AI-twinned, data-led opportunities are bubbling up in areas such as travel, automotive and health. Fourteen percent name IoT as their most exciting prospect for three years’ time, compared to 7% across FS as a whole.