PYMNTS.com reports on the move toward more efficient digital processes -- accelerated, of course, during the trend away from in-person banking that began as a result of the COVID pandemic. It's all in the latest Digital-First Banking Tracker®, wherein PYMNTS examines how FIs can realize savings in time and resources while offering customers an improved experience by deploying smart automation.
The move toward more efficient digital processes has 75% of surveyed companies across all financial sectors saying that they now employ some form of high-performance computing, deep learning and ML to accelerate core computing. Additionally, 43% of survey respondents who are implementing AI to improve their processes said that they are getting more accurate models, while 38% said AI provides a competitive edge over rivals. Twenty-nine percent said they have realized operational efficiencies due to implementing AI, and 28% attributed improved customer experiences to their implementations.
Artificial Intelligence and Machine Learning
When it came to accommodating the quickly-evolving needs of their members, PYMNTS notes that credit unions, in particular, wasted no time in embracing artificial intelligence and machine learning solutions.
Back-end deployments of artificial intelligence (AI), machine learning (ML) and other forms of smart automation, complemented by more seamless and integrated communications between systems enabled by application programming interfaces (APIs), are helping FIs to serve customers more efficiently and in a manner that feels more personal. Whether it is preventing legitimate transactions from being flagged for fraud or speeding up wait times for customer service, smart automation invisibly improves the customer experience in ways that are still directly felt by customers.
Fortunately for community banks, they are not going at this alone. As we have previously highlighted, core platform vendors like FIS, JHA, Fiserv, and Alogent have developed in-house solutions and "built the bridges" to close the technology gap so new and innovative technologies are able to integrate seamlessly.
The Move to Digital
There is a very purposeful move toward more efficient digital processes designed to accommodate new customer priorities and preferences, as evidenced by the following:
- 75% of surveyed companies across all financial sectors say that they now employ some form of high-performance computing, deep learning and ML to accelerate core computing
- 43% of survey respondents who are implementing AI to improve their processes said that they are getting more accurate models
- 38% said AI provides a competitive edge over rivals
- 29% percent said they have realized operational efficiencies due to implementing AI
- 28% attributed improved customer experiences to their implementations
As consumers continue to turn more and more to digital channels for their banking needs, FIs around the globe are adjusting how they employ physical branches. In the United Kingdom, less than half of HSBC’s customers are currently actively engaging with physical branches, and the FI plans to close 69 branches across the U.K. after closing 82 branch locations in 2021. Many of the closures are in larger cities, and some physical branches will be replaced with ATMs and pop-up banks to continue to provide customers in those communities with physical touchpoints. HSBC also plans to take a new look at how customers use physical branches, with plans to tailor services to the local communities, as well focusing on services customers prefer to engage with in-person.
The Credit Union Experience: Serving Members
While all FI's certainly need to be mindful of the "user experience," credit unions make it part of their brand to go the extra mile to emphasize a relationship beyond mere "guest" -- these are, after all, members of their organization that they are serving, and any credit union worth its salt will take that very seriously. They see smart automation, whether it falls under AI, ML or any other name, as an essential part of ensuring a seamless, reliable member experience.
AI and ML can improve an FI’s bottom line and lower its risk profile, all while turning mountains of data about customer habits and preferences into actionable intelligence that helps to build stronger customer relationships.
With the NAFCU reporting that nearly 60% of credit unions surveyed for NAFCU’s 2021 Report on Credit Unions mention AI learning machine adoption as a clear investment priority for 2021, it's clear to see that the trend towards adoption is well on its way. However, community banks and credit unions must be cognizant that the "user experience" does not stop at a glitzy user interface (UI). These financial institutions must deploy back-end technologies, like check processing through mRDC, to ensure that customers utilizing these services/solutions are satisfied with the results.