LEAPING FROM ANALOG TO DIGITAL: HOW AI TRANSFORMS BANKING OPERATIONS: PART II

By Adam Devine, WorkFusion

Adam Devine
Adam Devine

It’s no secret that artificial intelligence (AI) is making its way into more and more banks, being used to transform common business processes. Last week, I explored the many ways it’s improving compliance, but that is only one domain where IA can help banks transform from 20th century analog institutions into future-proof digital businesses. Below, I’d like to discuss three other arenas where IA will have a big impact, including back office transaction processes, call center operations, and HR.

How does AI digitize the back office?

The back office is a gold mine of IA value. Customer onboarding is a highly repetitive process that requires customers to submit multiple paper or PDF documents and in some cases even visit a branch. It can be as repetitive for customers as it is for operations, imposing the same process on a wealth advisory customer who wishes to become a credit customer. IA can turn this process into a highly personalized and quick experience for the customer.

Rather than imposing on customers the burden of finding and submitting of proofs of residency and income, Standard Bank, a WorkFusion customer, now uses IA to securely collect this information via APIs using customer PINs. This eliminates transit times, several customer phone calls (which increase the cost of most processes by 10x), and eliminates KYC holds, which together have reduced the average onboarding time from 22 days to under 5 minutes. Most importantly, by consummating the onboarding process digitally while a customer is on the line with a service representative, the bank is able to advise and upsell customers in realtime.

Deutsche Bank, another WorkFusion customer, is an example of a large bank using RPA technology to improve its productivity and quality of work. The bank is using RPA to automate work in functions such as trade finance, cash operations, loan operations, and tax, among many others. Deutsche reports that in every process in which they deployed RPA, the bank has seen a 30 to 70 percent increase in automation. This has allowed the bank to not only be more productive, but also reduce errors by using machines as “makers” and people as “checkers.”

How does AI digitize customer service?

Every time a customer picks up the phone or opens a chat with a call center agent, the cost of the transaction spikes 10x, but a quarter or more of these person-to-person exchanges are repetitive and rules-driven. AI-powered chatbots are trained to automatically handle these common conversations, freeing employees to focus on providing more valuable services. Chatbots (or virtual agents) are trained on historical conversations and get even smarter by “observing” real-time person-to-person exchanges. To the customer, chatbots are indistinguishable from people. They ask and answer relevant questions based on keywords and, once they’ve determined customer intent, execute processes within the back office to fulfill requests. Chatbot systems seamlessly escalate more complex conversations to human agents who use the chatbot interface to respond, which iteratively upskills the chatbot and creates more and more capacity for the call center. Several of the top 10 US banks are piloting this capability today.

IA chatbots not only reduces the cost of customer engagement, it also improves the engagement itself. Wells Fargo in February announced it was creating a team to help the bank provide more personalized customer service both in-person and online, like delivering specific recommendations on financial products to clients based on a variety of criteria. Minneapolis-based U.S. Bank is developing an AI designed to help branch bankers find answers to uncommon or challenging questions. Rather than spending time looking up answers in a knowledge center or calling an SME about any number of hundreds or thousands of products, the system will deliver an answer within seconds.

How does AI humanize HR?

Human resources is another area in banking where IA can deliver significant ROI. HR operations use IA to scan through job applications to filter out unqualified candidates. IA also makes the employee onboarding process faster and easier by automatically inputting personnel data into the systems. HR is still responsible for providing support once employees are onboarded, and many of these tasks can be automated by chatbots, like fielding questions about vacation time, benefits, and payroll dates. Chatbotscan also intelligently route more complex questions to HR managers and book meetings between an HR team member and an employee to streamline internal communication. 

AI is already being used in the most successful global financial institutions, and banks that ride the IA wave will gain a competitive advantage and retain and win new customers through better service delivery. Don’t take my word for it. Accenture reports 86 percent of bank executives agree that the widespread use of AI provides for a competitive advantage beyond just cost. Compliance, back office transaction processes, call center operations, and HR are only four arenas that AI will transform, but early adopters will go beyond, and will automate nearly all of their business processes in some capacity.