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23.06.2021 14 min read

3 Ways Analytics and AI Are Transforming Retail Banking

Artificial intelligence is shaping the future of banking – that much is not really new! Nevertheless, AI is still proving to be a broad field, with many banks not knowing what levers the new technology can pull for them. However, artificial intelligence applied in the right way does exactly that by setting things in motion in a very concrete way.

Be bold enough to embrace AI by implementing this transformation in retail banking as a whole. The question shouldn’t be how AI can save costs here and there, but what new opportunities the technology opens up for the development and delivery of next-generation products and services. Find out here how banks are reaping the benefits of AI and how this new intelligence is transforming the retail banking world.

1. Maximum Customer Satisfaction

Retail banks may not be retailers per se, but offering products such as loans, accounts and investments has always been part and parcel of their business strategy, The fact that banks are not only focussing on providing the best possible customer experience but are almost unanimously opting for a technology-driven approach is a noteworthy trend that will only intensify over time.

If technology is the driving force behind an excellent customer experience in banking, then data is the cart on which it travels. Data-driven banking is not so much about analysing the target group as a whole, but about understanding and helping individuals with their specific needs and challenges.

In our free data-driven banking study, you’ll discover in which areas Swiss banks see the great potential of data-driven strategies and new technologies.

The prerequisites for this have already been met in a banking environment: customers who interact with banks digitally generate valuable data that can be analysed, categorised and enriched in a targeted manner. However, bank customer data alone is not enough to deliver on the promise of a tailored banking experience in the long run. However, it does lay the foundation for figuring out how to personalise the banking experience and your customer offering.

But it is the targeted use of artificial intelligence and machine learning in the area of data analytics and enrichment that enables banks to identify and understand the needs and wishes of their customers in the best possible way. Data that is made usable then helps banks to develop better products and enhance the customer experience.

Additional capacities and products that precisely address the needs of bank customers increase sales through cross-selling and upselling. Using AI here helps not only to identify what is the most appropriate recommendation for each individual customer; it also helps you create personalised content that can automatically pop up at just the right time.

Want an example? Insights is an automated engagement platform that provides personalised tips to your banking customers. Learn how Insights protects your business customers from fraud before it actually happens.

2. Minimised Operational Costs

According to a study conducted by IT service provider Infosys, 51% of companies regard cost reduction as the main benefit of artificial intelligence. Banking is still a labour-intensive industry that requires a lot of staff for day-to-day operations. Banks continue to be concerned with minimising costs and spending on avoidable or repetitive tasks. According to Autonomous, adopting AI-driven technology can help banks save about 22% of these costs by 2030. In addition to this obvious cost benefit, however, new technologies are first and foremost a requirement for true scalability in banking.

Artificial intelligence is by no means a substitute for personal contact in banking; it’s a tool to perform simple, monotonous tasks that don’t require personal interaction. Banks can handle recurring, high-volume and time-consuming banking processes more cost-effectively and efficiently through technologies like RPA (robotic process automation). According to a study by Juniper Research, the global banking world could achieve operational cost savings of $7.3 billion by 2023 by implementing chatbots alone – this estimate was $209 million in 2019.

A wonderful side effect is that this also benefits your employees and banks as employers. In the future, bank employees can again focus on more complex, nuanced tasks that are more in line with their actual job description, such as interacting with customers and developing new products.

Forward-looking banks are already using AI to expand their product range, make their operations more efficient and cost-effective, and offer their customer base a better customer experience with greater added value. The effort required to do this is often smaller than it first seems. Find out here how Schwyzer Kantonalbank is generating a lot of added value from data it already has

Is your bank ready for artificial intelligence? Our experts will be happy to advise you on the individual opportunities available to you by using AI!


3. Reduced Competitive Pressure

The application maturity and availability of artificial intelligence has rapidly evolved for the better in recent years, creating excellent use cases, including in the financial industry. Using AI for valuable customer insights and customer experiences in banking can be a real game changer for your banking activities.

Unlike GAFA, banks have a relationship of trust and a history with their customers and know their banking customer needs in detail. With tailored service and product offerings, personalised communication across channels, useful information and automated processes, your institution will achieve better results, optimise workflows and create a positive working environment for employees. This combination of trust and innovation provides key differentiation points in the highly competitive banking environment.

With applied artificial intelligence and data analytics, you stand out from the crowd by:

  • Offering a better customer experience
  • Finding the right tone and timing
  • Automating repetitive tasks to ensure fewer errors and greater scalability
  • Reducing operational costs through automation
  • Attracting talent and motivating them with increased freedom
  • Assigning employees tasks that correspond to their core competencies, thereby generating real added value for banks

Learn how to lay the foundation for the banking of the future with machine learning and data analytics in our exclusive white paper.

… Don’t miss the opportunity!

Without using artificial intelligence in banking, and therefore missing out on the categorisation and analysis of data, banks are missing out on the most promising opportunity to develop innovative products and achieve better customer targeting based on data insights. No bank can afford to miss out on this opportunity in a market where the number of players is growing exponentially across multiple sectors.

The topic of artificial intelligence is only a black box at first glance. In the banking world, AI can be used very tangibly: you can highly personalise your approach, range of offers and advice based on customer behaviour.

Don’t have the experience or resources for applied artificial intelligence? Many banks feel this way, which is why they’re increasingly opting for strategic partnerships with innovative technology partners. A major study on data-driven banking shows that it’s definitely worth it! How effectively banks use their existing customer data for new forms of personalisation, product innovation or targeting can make all the difference to the customer experience.

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