How gen AI and data democratization can drive customer journeys

As advanced technologies evolve rapidly, financial institutions find themselves at a critical juncture in 2024 and looking into the next few years, as harnessing the transformative power of generative artificial intelligence (gen AI) is no longer an option but a necessity in an increasingly competitive market.

This is indeed shaping up to be the year of the customer as organizations strive to reshape the way they engage with their clientele — recognizing the imperative to create seamless, personalized and memorable experiences that transcend traditional boundaries.

Faced with the pressing demands for both speed and security, banks are fervently exploring innovative strategies to not only streamline their operations but also to gain a significant competitive edge.

This article focuses on strategic recommendations to help empower your organization as it navigates this dynamic landscape in 2024 and beyond.

Best practices for optimizing gen AI and minimizing risks and costs

Automation and AI are well established within the banking sector with machine learning and natural language processing (NLP) deployed for many years across areas such as reconciliations and settlement. However, there remains enormous scope to improve the customer experience through technology as banks continue their path to digital transformation.

Within consumer banking there are still many repetitive tasks that are undertaken across the customer lifecycle, using up the valuable time of employees without good reason. Gen AI can reduce these inefficiencies in combination with customer experience automation.

By applying gen AI to simple tasks – such as instantly alerting new loan applicants to missing, inconsistent or incomplete data in their application forms – customer dropout rates are reduced, and turnaround times improved.

Chatbots are becoming more sophisticated as banks look for new cost-effective ways of helping customers find the information they need. Product offerings and campaigns can offer more customer appeal when client issues are resolved quickly and efficiently while deepening the level of personalization.

Among the challenges, however, are the cost of running gen AI infrastructure and hiring the required talent which can be substantial. It is expected that banks will cherry pick low-risk programs to quickly improve the customer experience and drive growth, allowing employees to carry out higher value work and providing support to help them make more informed decisions.

Leading banks will need to keep a close eye on how gen AI is deployed at both an individual and departmental level because AI regulation will be the watchword for 2024. By combining strong governance and oversight, automation itself will play a key role in monitoring how gen AI tools are accessed. This includes everything from tracking individual logins and monitoring usage to reporting and archiving data outputs.

Emerging technologies boost data democratization  

Traditionally, financial institutions have operated in silos, leading to limitations in data quality, integration, scalability and governance. However, in the era of digital transformation, breaking down these silos has become imperative for banks to unlock the full potential of their data assets and deliver superior customer experiences.

Taking a holistic approach to making data more accessible can bring real business value to financial institutions faster because of increased transparency across departments. This also empowers employees to make data-driven decisions at every customer touchpoint.

By embracing data democratization, organizations can build new partnerships and create new business value with personalized insights and personalized products.

We are also now seeing an escalation in the use of intelligent automation (IA) as one of the tools to solve data silo problems caused by legacy systems and inconsistent data types.

As banks become more mature and confident in their deployment of automation software, we believe open banking will drive greater digitized and structured customer data that is more accessible, organized and analyzed to serve both institutions and customers alike.

With appropriate governance and guardrails in place, banks can use this data to make better decisions and gain a deeper understanding of customers and how to serve them. When customers are offered single views of all the financial institutions, they choose to entrust their money with or borrow from, they can also make faster or more strategic decisions.

Why 2024 and 2025 are pivotal for the customer journey 

Building better customer journeys has been a retail banking priority for some time, with onboarding being the dominant automation use case. From established processes such as mortgage applications, through niche services such as closing accounts, to micro journeys such as ID verification or credit card replacement, these infrequent or once in a lifetime customer journeys help define the loyalty and recommendation of customers for many years.

The last two years have seen a flurry of fintech firms focusing on niche customer segments and their associated journeys. With investment funding drying up, we see much of this knowledge and skill coming into traditional retail banking through acquisition or talent hiring.

The era of flatlining interest rates is over for now and churn is expected to increase.

Consumers – even unhappy ones – are notoriously reluctant to switch providers, but if you offer a fabulous switch account journey that puts the customer at ease, you will win market share and retain new customers.

A new generation of IA tools enables banks to build these new customer journeys – with faster “know your customer” (KYC) checking, digital onboarding and designing seamless processes – meaning customers can get what they want quickly and without pain. For younger customers, this means digital banking.

Bridging the tech talent gap 

The global talent gap is possibly the biggest invisible battle being fought by every institution across the finance industry, as in a tightening labor market, the fight for talent to deliver new transformation programs will continue unabated. Gartner expects the current demand for talent will continue to greatly outstrip supply until at least 2026, based in its forecast IT spend.

Banks have the choice to either pay for the best and brightest or develop their own education programs that build careers. From new starters to seasoned employees, recruitment is often slow and with high churn rates is a big turn off for prospects, so onboarding processes are a big deal and set the stage for careers in banking.

Again, banks need to decide when to use automation and AI to make their roles more fulfilling, or as a way of replacing the most soul-destroying processes with technology all together. Get it right and you’ve not only got employees for life, but also as advocates and customers.

As lending restrictions tighten and interest rates remain relatively high, the banking industry braces for heightened competition. By designing a better customer experience, making data accessible across the organization, and taking away the menial and laborious tasks in banking operations and focusing people on higher value work, employees can look forward to better career options, satisfied customers, and more interesting work.

Joe Collura is Vice President and Solution Engineer, the Americas, at SS&C Blue Prism.