Time to embrace AI: Machines for humans not vs humans

AI can change the face of the banking sector while reducing costs, increasing employees’ efficiency and more.

Like the expectations of employees, customersâ?? expectations have also evolved over a period who now look for more personalized services at a competitive cost.

Like the expectations of employees, customers’ expectations have also evolved over a period who now look for more personalized services at a competitive cost.

There has been an interesting shift in the workforce over the years. Employees in any industry do not work just for money but they strive for work-life balance and a conducive work environment. It cannot be argued that a happy employee keeps the customer even happier. The situation is no different in the banking sector. And like the expectations of employees, customers’ expectations have also evolved over a period who now look for more personalized services at a competitive cost.

What does this mean?

This means that employers need to be proactive and create a work environment that reduces undue stress by eliminating employees’ involvement in repetitive or template-based tasks. This is where Artificial Intelligence (AI) comes into a picture. AI or machines that are capable of performing specific tasks normally requiring human intelligence, can help employees focus on tasks of greater value while reducing chances of human error and increasing overall productivity.

AI has the capability to do many hats :-

  • Sense and perceive the world by acquiring and processing images, sounds and speech.
  • Analyse and understand the information collected by adding meanings and insights.
  • Act based on comprehension and understanding
  • Learn based on real life experiences and improve performances

AI and Banking

In the banking space, the use of AI is crucial at every stage—in lending, customer service, fraud protection, employee management/training/hiring, and more.

A sneak peek into the use of AI in Banking:

People: Productivity and efficiency of the workforce can be enhanced with the use of AI tools like a chat-bot or a Virtual Assistant that can simulate a conversation with a user in natural language through messaging applications, websites or mobile apps. In Banking, chat-bots can be used for customer support and help in increasing efficiency and enhancing customer experience while reducing costs.

Product: Customised products can be offered to customers by using technology to analyse historical data, understand risk appetite, income profile etc. This would make the process objective and reduce the risk of human errors. Personalized portfolios can be managed by an AI software like Bot Advisor, which does not have any vested interest and are capable of intelligently managing personalised portfolios while ensuring higher volumes than humans.

Process Automation: Smart and intelligent automation can help the humans get rid of the repetitive tasks and they can focus on providing more personalised services requiring a human interface. The tools like OCR or Optical Character Recognition can capture data with which the machine learning software can generate insights, reducing the back-office processing effort.

Data Security: Banks are custodians of large amount of data that can be used to generate insights into the lives of their customers, their spending habits/patterns. Analytics can be used to analyse the data and develop tailor-made products and services for customers. Also, AI tools can be used to keep a check on suspicious behaviour and dubious emails to prevent security breaches.

In simple words, AI can help banks reach potential clients more easily, develop smarter products, build better relationships, enhance customer experience and improve service delivery, thereby fuelling growth in business and reduction in costs.

Is a threat of job losses due to AI well-founded?

It is often feared that the adoption of AI would hurt the creation of job opportunities. Automation is not synonymous with job cuts but with skill enhancement. There can be a little slowdown in job creation in banks but at the same time, there would be jobs at different levels. For example; banks need to approach customers and make them aware about the financial products. Besides, there would be an increased requirement of data scientists and a sea of opportunities for digital entrepreneurs.

In fact, a data by a leading research firm suggests that 77 percent of the banks plan to use AI to automate tasks to a large extent in the next few years with the majority of them believing that the AI would result in job creation.

The Final Word!

If the human resources are provided adequate training in using the AI tools and structured mechanisms for collecting and validating data are put in place, AI can change the face of the banking sector while reducing costs, increasing employees’ efficiency and generating better experiences for customers.

—By Virender Jeet, Senior VP – Sales & Marketing (Products), Newgen Software.

Source: https://www.deccanchronicle.com/technology/in-other-news/300419/time-to-embrace-ai-machines-for-humans-not-vs-humans.html

Compliance Systems and Newgen Software Announce Strategic Alliance to Enable Customers Meet Compliance in the Lending Space

Compliance Systems and Newgen Software Inc. (Newgen) have announced a strategic alliance that will provide their joint customers with best-in-class solutions to help them drive digital transformation while remaining fully compliant. Under the agreement, Newgen and Compliance Systems will work together to develop an integrated solution that enables compliance in the lending space.

The partnership is aimed at providing customers with a platform which will enable their users to significantly cut down on data entry and manual tasks to generate compliance documents. This alliance will have Newgen’s Commercial and Consumer Loan Origination solutions, built on Newgen’s business process management and enterprise content management platform. seamlessly integrated with Simplicity by Compliance SystemsTM for banks, credit unions, and other financial organizations. The integration between Newgen and Compliance Systems will provide another layer of efficiency for joint customers to optimize their workflows and reduce loan closing time.

Compliance Systems, through its comprehensive web-based application Simplicity by Compliance SystemsTM, will enable users to carry out lending-related compliance processes. Newgen’s lending solutions will work in conjunction with the former and extract greater value from transaction-specific data to render appropriate documents and eliminate redundant processes.

“Our partnership with Newgen opens many avenues for us and gives us the opportunity to be an enabler to banks, credit unions, and financial services organizations across the country. Together, we will help organizations achieve greater compliance and create transparency and efficiency throughout their lending processes. We are excited to partner with Newgen and are optimistic about taking our current growth trajectory to the next level,” said Ronny Chapman, Chief Strategy Officer at Compliance Systems.

“Lending compliance is critical for financial organizations and getting it right can result in superior customer experience. Our partnership with Compliance Systems is aimed to ensure that financial institutions stay compliant with lending industry regulations, relying on Newgen’s robust and agile technology platform for their current and future business needs,” said Diwakar Nigam, President, Newgen Software Inc.

Newgen’s commercial, small business, and consumer lending solutions help financial organizations automate and streamline the lending life cycle from origination, underwriting, disbursement to servicing.

About Compliance Systems

Compliance Systems is a best-in-class provider of financial transaction technology and expertise headquartered in Grand Rapids, MI. With more than 25 years’ experience with financial transaction data analysis and documentation, Compliance Systems currently supports content configuration and compliance risk management at more than 1,300 U.S. banks and credit unions. The Compliance Systems warranty covers all 50 states and the District of Columbia, giving clients confidence that documentation meets compliance and legal needs. Compliance Systems minimizes transaction risk and reduces resource expenditures so that institutions can focus on business development.

For more information, please visit www.compliancesystems.com

About Newgen Software Inc.

Newgen Software Inc. is a global provider in banking process automation with more than 200+ banks, credit unions, and financial services institutions as its clients. Newgen’s banking process management framework automates critical business processes for banking institutions across commercial lending, consumer lending, customer onboarding, online account opening, trade finance, digital and mobile customer experience strategy. Newgen offers flexible on-premise and cloud-based solutions to its banking customers.

Source: https://newgensoft.com/company/press-releases/compliance-systems-newgen-software-announce-strategic-alliance-enable-customers-meet-compliance-lending-space/

Is Your Bank Ready to Navigate the Open Banking Crossroads?

What Is Open Banking?

Touted as the ‘new face of digital transformation’, Open Banking derives its name from ‘Open Innovation’, which was coined by Henry Chesbrough who defined it as-

Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively.

– Open Innovation: Researching a New Paradigm

Increasing customer expectations have mandated innovation and the delivery of better digital customer experience. However, as digital ecosystems evolve into innovative operating models, like Tencent (WeChat) and Alibaba in China, they begin to collide. And, in such a scenario, if they are unable to share information between themselves, it can result in critical loss of innovation.

This is where Open Banking and open APIs become crucial. Without interoperability and open banking, banks will not be able to access valuable innovations, which can directly benefit them and their customers. By allowing the sharing of their transaction data with third parties, a customer will gain a holistic view of their finances, thereby simplifying their management and control.

Why Should You Care?

Open banking can have a number of potential benefits for banks, ranging from new revenue streams and improved customer experience to a sustainable service model for traditionally underserved markets. Moreover, a lot of advancements until now have come from firms outside the financial services realm, making it more important for banks to adapt to sustainability.

The ball has already been set rolling with well-known players like Mint, and the number of financial institutions engaging with API integration is steadily growing. So far, 67 firms have been using Open Banking and, according to the Open Banking Implementation Entity (OBIE)the technology was used 3 million times in July, up from 2 million usages in June. Some examples include alternative underwriters such as Lending Club in the United States, Lenddo in the Philippines, M-Shwari in Africa, which uses data from social media to predict the financial stability of a consumer, and payments disruptors like Stripe and Braintree.

How Prepared Is Your Bank?

Open banking is the next big revolution and it is not around the corner anymore. In an environment that changes this rapidly, it is important that your bank focuses on agile processes, which are not service specific. Adding on applications to your business processes and systems can, at best, lead to what Henry Ford described as “faster horses”. You need flexibility and contextualization in your enterprise architecture to support diverse customer interactions and adaptability.

Contextualization will optimize customers’ experiences and journeys. Whereas adaptability will offer the technological cornerstones that are required to compete in the post-open banking era.

source: https://www.openbanking.org.uk/about-us/news/open-banking-progress-update-july-august-2018

source: https://newgensoft.com/blog/bank-ready-navigate-open-banking-crossroads/

5 Burning Technologies You Need to Become a Bank of the Future

Digital banking is no more about digitizing banking channels or products. It’s about digitizing the core utility of a bank. Since the advent of banking, the core utility of banks has simply been the trust customers place in them to safeguard their financial resources. With the passage of time, banks have used technologies to deliver this utility to their customers through different mediums.

However, banks have the tendency to pave the cow path and digitize long-standing, obsolete operational models. What a bank of the future needs, instead, is to rethink its role in its customers’ lives and to offer ease of access to its utility. Let’s see how banks can do this and the technologies that play a key role in it-

Voice

Voice is the next big technology poised to reinvent the financial service industry. Capital One is now using Amazon’s Alexa to help customers pay their credit card bills. But, this is yet another example of iterative thinking where Capital One used an already existing product (credit card) and put it on a voice channel.

The golden opportunity for banks lies in rethinking their operating model and using voice as a unique identifier. A customer’s voice can simply be attached to a value store forgoing the plastic credit card or a 16 digit number to make the payment. Similarly, it can be used to access other lines of credit, check account statements, get financial advice or engage in just about any other financial activity.

Robotic Financial Advisors

Traditionally, financial advisors have been human beings that manage assets and offer advice. However, banks should integrate with the lives of customers to the extent that consumers should readily ask Siri or Alexa if they can afford to go out for dinner. In case of retirement plans, they should be able to ask how much to save each week for retirement. Or how much should someone save each week to pay off a student loan or a HELOC.

These are questions a smart bank account should be able to answer. And, Robo Advisors are the answer to this question and they are already doing so. In fact Robo advisors beat humans by 11-12 % in 2017 in terms of return on the portfolio.

Blockchain and AI based Regulators

Blockchain-based systems combined with Artificial Intelligence can ensure that regulatory compliance does not require human intervention at all. That is, regulators can become primarily AI based. Today in AML, a transaction is tracked and data gathered, passed off to the central bank to combine the reports and check for criminal activity. However, with AI-based regulators, flows of money can automatically be tracked to monitor and determine suspicious activities and take the requisite actions.

Similarly, AI can be leveraged to combat fraud. KYC does not have to be a bank’s job. A customer can be identified based on a unique set of data –their occupation, facial identifiers, and defining biometrics. Banks may be trusted parties that seed identity algorithms into the public, private or commercial identity databases. And, this can play a key role in combating identity theft.

The Right Cloud

Cloud-based platforms are the foundations to a scalable banking architecture. Your bank must be cloud-based to take advantage of frameworks like identity, cryptography, and security. Further, cloud-based banking simplifies regulatory compliance as regulators can increasingly monitor a bank’s compliance performance through RegTech strategies that analyze the easily gathered data.

Be it a commercial, private or public cloud database, cloud computing holds the keys to the future. Without this key capacity, your bank stands no chance against Fintech competition as more and more upcoming Fintechs are cloud-based, not less.

Mobility

Mobile is one of the most preferred banking channels today, and the bank account is increasingly being seen as an artefact that exists on a mobile phone. It is estimated that from 2010 to 2030 nearly 2.5 billion people will enter the financial services ecosystem and 95% of them would never have visited a bank branch.

Bank of America has launched Erica, a mobile phone-based banking assistant. BoA plans to extend Erica’s capabilities to offer financial guidance by analyzing consumer behavior and using predictive analysis to assess financial habits and offer guidance. And, it is no wonder that the bank has increased its mobile user base by 5% in just six months. 

The Way Forward

Fintechs, P2P lenders and other alternative financial services players are coming up with increasingly innovative business models. The only way traditional banks can survive in the coming future is by being more innovative with their business models. Simply appending futuristic technologies isn’t going to suffice. Banks need to go back to the drawing board and build from the bottom up.

Source: https://newgensoft.com/blog/5-burning-technologies-need-become-bank-future/

The Journey From Prospect to Customer Should Be Anything but Tedious

Picture this: after weeks of procrastination, you finally decide to give your health the importance it deserves and sign up for an online fitness and nutrition program. You log onto their website and choose the program that best suits your needs. You are then led to a link with the necessary details of the program, make the payment, and soon receive a confirmation e-mail and SMS.

In less than ten minutes, you’ve secured yourself a program that promises to help you take care of your health and nutrition. And, in less than ten minutes, the online program turned a prospect into a customer. Wouldn’t it be brilliant if your insurance company could do the same?

Insurance extends beyond health, so leave no prospect uninsured

In a contrasting scenario, picture this: a prospect decides to buy an insurance policy, to help cover his/her health, life, home or financial assets. The prospect logs on to the website, fills in the details required as part of the KYC process, selects the premium policy, receives a confirmation SMS and E-mail, and reaches the payment gateway. The payment is made, but there is no acknowledgement or confirmation email or SMS from the insurance company. How do you think this will make the customer feel about their choice of brand? Sounds like the perfect recipe to lose prospects at the altar of tedious onboarding, doesn’t it?

One doesn’t need to be a rocket scientist to know that a customer logs onto the website of an insurance provider after a fair amount of market research. Once they choose your brand, they expect the journey from prospect to customer to be smooth. New-age customers expect a personalized experience at every possible touch point spanning across multiple channels, such as print, mobile, web, and email for policy documents, renewal notices and self-service portals.

Had every step of the on-boarding process been seamlessly connected, this prospect would have easily turned into a customer, thereby making this provider adept at new business acquisition. In an alternative and successful scenario, the customer would have by now received a payment confirmation e-mail, Policy schedule and Policy document, and an SMS mentioning the required details.  This would not only lead to the acquisition of a new customer but also increased trust in the brand.

Complex as it may sound making this journey a flawless one isn’t impossible

Customers nowadays have several customer experiences with different brands to choose from, and one flawed experience is enough to make them switch. This makes meeting their expectations slightly challenging. Extending great customer experience across various channels, such as direct sales, Affiliate, Branch, Web, and Mobile Apps is often easier said than done.

Integrating and connecting across all of these channels, and thereby ensuring an omnichannel experience, goes a long way when it comes to cashing in on new business opportunities and acquiring customers. A smooth onboarding experience ensures no prospect ever leaves without an insurance policy.

 

Source: https://newgensoft.com/blog/journey-prospect-customer-anything-tedious/