The Future of Finance: 3 Ways AI Impacts FinTech
For many of us, when we think about putting “the future” and “artificial intelligence” in one sentence, scenes of I-Robot and The Terminator may come to mind. And while Elon Musk and Jack Ma’s recent debate at the World Artificial Intelligence Conference was far from a Hollywood movie scene, one thing it did show was that artificial intelligence (AI) will have an inevitable impact on our future.
For the Finance industry, AI has shown how valuable it is when it comes to better online security for eCommerce websites, improving the efficiency of online processes and analysing consumer behaviour to help make accurate predictions that will inform marketing strategies.
From chatbots to voice-activated search devices and digital assistants, the integration of AI has been a welcome change in the FinTech industry. Now, more than ever, individuals have access to technology, and this will continue to drive AI-powered innovations that the Financial industry will see.
In this post, we take a look at the 3 ways that AI is impacting the future of Finance.
Banking, But Better
There is a wide range of industries that have already been affected by AI – hospitality, tourism and retail, amongst others. But the finance industry has seen some significant changes, particularly in banking. From introducing online banking to apps where customers can manage their money on their mobiles, AI has brought convenience to customers that will continue well into the future.
Established banks have already begun to incorporate AI-based solutions to traditional banking problems through automating certain aspects like self-service tellers or applying for credit cards and loans online. Many of the larger banks in South Africa have been innovative with their mobile apps that allow customers to send money, receive bank statements and open investment accounts at their finger tips. But FinTech has also seen the rise of new, disruptive banking methods. From the recent launch of South Africa’s first fully digital bank, Tyme Bank, to Discovery having the world’s first behavioural bank, what do these AI-inspired innovations mean for the future?
1. NLP for Better CX
For one, especially in a country that is multicultural and multilingual like South Africa, AI and Natural Learning Processes (NLP) will prove to be necessary in reaching and retaining customers. By allowing customers to better share their needs and requirements, in a language they understand with AI, financial institutions can give a better overall customer experience (CX) in a friendly way that is more personal to customers.
2. Audience Insights for More Engagement
Secondly, these innovations help banks better understand the behaviours of customers. Being able to track transactional behaviours allows banks to learn more about a customer’s preference and spending habits, providing insights that they can use to tailor the service they provide. Banks are also better able to reward their customers who engage with them more. Incentives such as discounts on travel packages, free access to airport lounges or paying for fuel, are ways that banks encourage engagement with them, a strategy that works well particularly for millenianls and Gen-Z.
3. Mobile-First to Make Everyone’s Lives Easier
Another aspect of FinTech that has seen some AI involvement is how we can now use our mobile phones to make purchases. Outside of the banking apps that have been developed, smartphone companies like Samsung and Apple have introduced contactless payments on their devices. Both Apple Pay and Samsung Pay act as digital wallets, and these could soon replace the need to carry an actual wallet in future. Because of their efficiency, contactless payments using phones have created an effortless feeling that seems much preferred than inserting physical cards into a terminal.
Changing The Customer Experience One Chatbot At A Time
As technology continues to evolve and impact different industries, FinTech businesses have quickly adapted to the changes that technology brings to keep their customers happy. While messaging apps have been the way for businesses to communicate with customers, one way that AI has impacted this field is through the implementation of chatbots for a better overall customer experience.
Chatbots, which is essentially an AI software that stimulates a chat with a human user over the internet, have helped FinTech businesses bridge the communication gap to get closer to their customers. Not only are they more conversational but chatbots provide customer service better than the FAQ page on a website. While there is still a large number of South African customers who make their purchases in store, 76% of people use their mobile phones to inform their buying decision. This shows how an increase in the use of smartphones is also one of the top digital channels for communications and marketing. There’s no doubt that the future will mean FinTech industries taking advantage of this.
For customers within the FinTech industry, chatbots are beneficial in the service that they provide. Their ability to give customers step-by-step guidance on how to transfer money via mobile banking apps eliminates the need for customers to stand in queues at the bank. While chatbots also offer client satisfaction through their efficiency, customers love convenience of chatbots because they provide because of their effortless and quick responses. With more demand for instant communication, chatbots will continue to be the answer to keeping up with this demand in future.
How AI Also Impacts Other Industries
While the Fintech industry has been quick to adapt to technological trends that require AI systems, other industries have also found the need to use AI. Because consumers have gone digital, and communicate with businesses online more often, industries across the board are seeing the importance of innovative ways that ensure they are still able to engage with their customers in personalised ways using AI-powered systems.
For the retail industry, the debate on whether there will still be physical stores in the future remains a hot topic of discussion. But one thing is for certain – the introduction of online stores and eCommerce have digitally transformed the future of retail. While many have still been wary about purchasing items online due to cyber security, AI systems have managed to minimise this risk by securing websites and installing SSL certificates to ensure a sense of trust amongst customers.
Top Tip: For more insights into how AI is changing the retail industry, read our blog post on What Digital Transformation Means for the Future of Retail here.
Tech startups have also seen the benefit of incorporating AI into their businesses. With resources and budgets that are limited, tech startup businesses are looking towards AI solutions that, much like bigger businesses, will help them provide great customer service and make data-driven decisions. And for the Hospitality and Tourism industries? Making hotel bookings have been made easier thanks to apps instead of websites, and being able to compare travel prices across multiple data resources on a single website like Trivago. But these industries may simplify their customer service and experience even further, such as through introducing augmented reality to give interactive hotel room tours that will allow potential guests to explore their rooms in a way that 2D images wouldn’t be able to.
Top Tip: To learn more about how AI is making business easier for startups, SMEs and conglomerates in the technology industry, read our article on Improving Business Processes with Artificial Intelligence here.
Regardless of what industry you’re in, a crystal ball isn’t needed to predict that AI systems are in your future. With an increasing amount of data that needs to be sifted, getting the most out of AI systems is crucial for businesses who want to get a deeper analysis and audience insights that will not only inform them of what is current, but will guide them towards the future.
Want to know how Meltwater can help give you data-driven insights for your next marketing strategy? Contact the Meltwater Africa team today to have a look at our Media Intelligence suite of tools for free.