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AI is the Future of Banking’s “New Normal”

April 28th, 2020

Continuing on with business as usual isn’t the only challenge the current crisis presents. However, the banks and credit unions that end up weathering the storm will be the ones that make the most of the opportunity to be there for customers and members. Such an undertaking requires balancing risk management with compassion and unprecedented personalization. With fintechs and online banks building their businesses around Artificial Intelligence, the tools to step up and deliver for banking customers are already available. When the dust settles, AI could be the key to banking’s “new normal.”

Forget Silos—Put AI at the Core

The separation of different departments and interests within a financial institution happens fairly organically and, provided that the various teams share information, organizational silos can work. In fact, until recent years, using a silo structure was a common way to organize businesses, but the concept is limiting and ineffective if those silos interfere with team mentality. Going forward, replacing a silo foundation with AI at the core of your bank or credit union will position your institution to better serve your customers and members. Putting AI at the core means departments share a hub or integrated database and consistent code. The uniform technology makes all information available across your entire organization. The result is that AI-based models are more scalable, so they power growth while making your institution invaluable to customers.

More Scalable Operating Models

What makes AI operating models so powerful when it comes to scalability is that it shifts the onus of delivering products and services from human employees to the AI process. Amazon is the best illustration of the potential scalability of AI models. There’s no denying the e-commerce giant blows away traditional retailers when it comes to products and service, and it’s all due to the technology Amazon employs. The tech is present not only at the warehouse level where orders are filled, but it’s also used to track every purchase customers make, every product they search for or look at, how they rate their purchases, and every ad they respond to, both off and on the Amazon site. Customers know whatever they need, they’ll find it on Amazon, and they’ll get it ASAP. And, if they can’t find the exact thing they’re looking for, Amazon will suggest an alternative. Add to that exceptionally fulfilling experience little perks like free 2-day shipping and emailed suggestions on what movies or shows to watch, and it’s no mystery how the company has cultivated such a large following of satisfied customers. The good news for the financial services industry is that the same AI-driven processes can be utilized to build loyalty and satisfaction among banking customers.

Get the Ball Rolling

Transitioning to an AI-based operating model doesn’t happen overnight, and you won’t see the results immediately, either. It takes time for this type of model to start generating at scale. Remember that Amazon started in 1994 as an online book retailer. Over the first 5 years, music and videos were added to the mix, and the century would turn before the company really started getting some traction and moving toward becoming the household name it is today. The point is that you have to start somewhere to get the ball rolling. Devise a strategy to rebuild your operating model on a foundation of AI, with three anchoring corners of analytics, data, and software. Reinforce the concept, unifying all departments within your institution, both from the top-down and the bottom-up. Assign sponsors to be role models, champions for the shift to AI who lead the change by example. Thorough planning and patience will be rewarded when the ball starts rolling and gains momentum, taking your institution along with it.

Thinking Outside the Banking Box

You’re probably starting to understand that settling into a new normal centered around AI processes requires thinking outside the traditional banking box. With digital banks and fintechs’ increasing presence, you may have already recognized the need to go beyond your institution’s identity. Using AI to do the heavy lifting will take care of that. With technology powered in the background helping phone agents, tellers, and loan reps recognize cross-selling opportunities, your institution can offer more value with exceptional personalization thanks to your AI-centered database.

Shifting gears to focus on an AI operating model also extends to educating and retraining existing teams as well as reconsidering your hiring pool. Digital experts—professionals experienced in working in data sourcing, analytics, and processing—are as valuable to an AI-centered institution as experience in bank management, commercial banking, real estate lending, and financial advising. As the Harvard Business Review points out, when it needed a new CEO, Uber didn’t go looking for someone with experience running a limousine service. Instead, they hired Dara Khosrowshahi because of his experience as the chief executive officer of Expedia, another digital firm.

Help Getting Started

If the thought of changing your operating model seems out of reach, don’t let it overwhelm you. It doesn’t have to be all automation and sci-fi level gear. Starting out with easy to implement tech can be the first step in getting on with the business of doing business. Avannis surveys and reporting tools are the ideal examples of the kind of technology that can give you an edge with customers and members on this new frontier. What’s more, we do more than set you up with a selection of flexible, customizable surveys and turn you loose. When you partner with Avannis, you’ll also benefit from our experience. We’ll help you interpret the data you collect and guide you through the various options and steps so you can communicate more effectively with customers and provide them with a new level of value, personalized just for them. Contact Avannis today and let us show you what your institution’s new normal can look like.