Technology has completely revolutionized the ways you interact with diverse industries right from taxing and shopping around town. According to the findings of important surveys like the annual survey conducted by the Economist Intelligence Unit, it was revealed that keeping up pace with technology and ever-changing customer behavior and technology are supposed to be the most crucial trends to lenders and bankers often much more as compared to regulations.
As per a relevant article on www.forbes.com, Artificial Intelligence in recent years has actually evolved from just an emerging technology at best to a really widespread tool to improve and boost business efficiency. Artificial intelligence is now being implemented and embraced in several industries for handling administrative jobs, assisting customers with solutions for issues and making recommendations and predictions based on data that has been stored in the past.
Credit unions, banks, and other financial organizations are increasingly being pressurized to accelerate their pace and keep up with cutting-edge digital trends for aligning with customers’ preferences. There are numerous areas where lending organizations and banks are incorporating technology seamlessly in their endeavors to enhance and boost customer satisfaction.
Digital Is the Way to Go
As per https://www.abrigo.com, smartphones are responsible for dramatically transforming the banking and the overall lending sector. Overall borrower happiness and satisfaction are being given top priority and are ranking higher consistently among credit unions and small banks; however, big banks are reigning supreme in terms of online and mobile satisfaction. As per a Retail Banking Satisfaction Study conducted in 2018 by J.D. Power, borrowers and customers who effectively used the services of both branch banking and online banking combined together seemed to be the most satisfied. However, branch-only and digital-only customers got the lowest satisfaction. Even though customers are not keen on interacting with the branch while transferring their money or checking their balance, there are still several customers who are looking for personal interactions particularly, in such situations including seeking advice or handling concerns, researching fees and products, and opening a brand new account. Today reputed banks and lending institutions such as Liberty Lending are relying on technology to offer much-improved services.
Automating the Lending Process: Need of the Hour
The main reason why people use technology throughout their everyday lives is actually the intense desire and willingness to simplify processes and save time. Lenders are realizing that a major pain point, as far as, borrowers are concerned is the time taken for processing a loan request and so, they are seeking technological intervention in this particular area. More than 50 percent of bank applicants have admitted that they are very frustrated because of the difficult application process and incredibly long wait times to process credit decisions. Financial institutions and banks are realizing the importance of digitalizing and automating the entire lending process to speed up the overall lending process. Digitalization would dramatically cut down the time that is devoted to originate a loan and provide speedy decisions swiftly.
In the past few years, AI or Artificial Intelligence has evolved from being just an emerging technological trend to a wide-ranging tool for boosting business efficacy. AI is currently being utilized in several industries for handling administrative tasks, making predictions, helping customers with issues, and making recommendations depending on past information or data.
In the current scenario, banks and other financial institutions are trying their best to leverage the power of Artificial Intelligence for making their clients’ lives better and easier. Here are some effective ways financial institutions could best implement technology for boosting customer engagement and improving retention.
Personalize Customers’ Experiences
Banks and lending institutions are implementing AI or artificial intelligence for customizing offers based on client needs and behaviors. For instance, Artificial Intelligence could be effectively observing all money transfer activities to some competitor banks and accordingly offer a better or matching interest rate for fortifying the relationship. Suppose a core customer informs that he has mistakenly overdrawn his checking account, in such a situation, AI could make a decision to automatically waive the fee.
Customer services in the banks and other lending institutions are overhauled by the implementation of AI. Previously, an efficient customer service team seemed to be essential for the success of any financial organization. Any job that necessitated the effective handling of money and all other financial issues necessitated trained and highly-skilled staff for solving problems and providing necessary assistance to the customers and potential customers. However, in 2019, chatbots have aggressively and swiftly become the norm for interacting effectively with customers.
Use Predictive Analytics in Lending
Banking relies heavily on data as such it is referred to as a data-heavy industry especially with loan facilitation. All banking and lending functions and decisions are actually driven by data. However, banks which are known to implement a long, paper-based application procedure would be losing out to the competition. Predictive analytics helps in streamlining the continuous customer data mining, as well as, analytics processes which go with lending culminating in speedy loan completion and saving sufficient time for boosting customer interactions.
Online Banking
Banking was conventionally something which was being performed basically in the non-virtual landscape. Traditionally, individuals would require going to their brick-and-mortar banks and other lending institutions for withdrawing money, transferring funds, and sorting out finances. But today, these sorts of premises seem to be becoming increasingly redundant. Today, online banking is certainly becoming more and more popular and sophisticated. Today you could transfer money or even pay for goods exclusively with just a click of the button. We are definitely living in an era where bank accounts could be accessed on computers, phones, and tablets.
Fraud Detection
Investigating and identifying a fraud used to take place with the integrated effort of man and the machine. We know that the system would assist in tracking all potential fraudulent transactions while the trained staff would be examining all the information meticulously for effectively determining whether there was any fraudulent activity or not on the account.
However, today, AI is increasingly progressing way beyond the capability of the individuals who are actually designing it. Thanks to Artificial Intelligence, it is able to successfully track fraudulent activities by tracking the victim’s history and then calculating and predicting the chances of fraud depending primarily on previous patterns. All this could be done by machine far more quickly as compared to the normal speed of humans that implies that many of the fraud detection teams no longer need to be as large as they normally are and they could be reduced down to just a few fraud experts.
Conclusion
We have examined only a few ways of how technology is gradually changing the way the finance industry operates today. The progress that takes place in any industry is generally a type of disruption since the existing technology and people are rendered obsolete. Moreover, they need to be either upgraded or eliminated. We understand that the finance industry’s human element is very much at stake.
