The COVID-19 pandemic has accelerated FS industry disruption and urgently catalyzed the need for building digital capabilities. Retail and SMB customers demand a shift from face to inter-face. Realizing this, banks are shifting away from conventional touchpoints to digital channels. Almost 63% of incumbents plan to permanently shut down one-third of their branches, and 74% allocate at least 10% of their IT budget towards automated chatbots and AI automation.
While banks determine the best move forward (build, buy, or partner), it is crucial to bridge the gap between customer want of emotional connect and the bank’s requirement of increased shareholder value.
Eighty-five percent of banking executives stated that AI and AI-powered automation would be their top tech priority in 2020–22. Two in three executives believe that AI-powered solutions can provide up to 25% improvement in cost savings, customer experience, and risk management. As banks realize the benefits of AI, they are starting to pilot AI-use cases across the banking value chain. However, discovering the true potential remains a question.
Challenges across pillars of People, Technology, Business, and Finance have hindered AI adoption at scale, deterring over 60% of projects from moving beyond the pilot stage. Banks will have to recalibrate their organizational capabilities to focus on data-centricity, progressive culture, modern infrastructure, and a robust governance framework. Moving away from the current mantra of “AI is the cherry on top,” banks need to understand that AI should be at the core of banking transformation.
An outcome of AI-driven transformation is the rising adoption of conversational commerce. Banks, equally focused on delivering superior customer experience and achieving operational excellence, are augmenting their traditional channels with AI-powered voice assistants. While adoption remains low, selected banks are leveraging the BigTech infrastructure to engage with their customers through voice assistant solutions.
Banks must assess their “as-is” state to envision “to-be” state. They must build people, business, and technology readiness. Finally, they must enact implementation using a hybrid approach with the right ecosystem partners.
Traditional players need to shift from new paralysis to new normal. Banks will have to prioritize digitization accordingly and evolve from digital banking to intelligent banking to intelligent ecosystem using AI as an enabler (at the core). AI-powered conversational banking will assist banks to engage tomorrow by leveraging conversational channels today.
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