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The use of artificial intelligence (AI) technology at banks will be the difference between success and failure for them in the coming years, according to around three-quarters of bankers.
According to a survey by the Economist Intelligence Unit (EIU), for Temenos, only cyber security will be a bigger primary focus for technology investment than AI in the next few years.
A total of 35% of executives said cyber security is their primary technology investment focus, compared with 33% prioritising AI platforms.
Banks recognise the importance of investing in technology to improve customer services, with AI’s potential to personalise customer experience seen as an attractive prospect. Some 77% of respondents said AI will separate the winners and the losers. Digital advisers and voice-assisted engagement channels will be the destination for a large part of AI investments, said the report.
Beyond AI, there has been an increased acceptance that new technology will drive banking over the next five years, with 66% of banking executives agreeing, compared with 42% in the same survey in 2019.
Almost half (45%) of the 300 senior executives questioned globally are planning to transform into digital ecosystems to improve customer experience and introduce new revenue streams.
This will see a shift in the way banks develop software with an increase in use of DevOps. Most respondents (84%) agreed that DevOps will drive transformation in core banking.
The report also said that the Covid-19 pandemic has accelerated digital transformation at banks. Pete Swabey, editorial director of Europe, the Middle East and Africa (EMEA) at the Economist Intelligence Unit, said: “Retail, corporate and private banks were already under pressure to deploy new technologies quickly and change their cultures to compete with big tech firms and payment players and to deliver an engaging digital experience. Now, as digital banking surges as a result of the Covid-19 crisis, this task is more pressing than ever.”
For example, high street bank TSB was recently able to get a smart agent up and running in just five days. It worked with IT services supplier IBM to develop the smart digital agent to serve customers in the absence of bank branch support and overloaded call centres during Covid-19 coronavirus pandemic. Within five days of the agent going live on 25 March, it answered more than 40,000 requests.
There are plans for a smart agent to eventually be integrated across all bank systems to enable the complex organisation to provide a single point of contact for a customer.
According to research from BuyShares, which provides data to investors, the global robo-advisers industry is expected to reach $987bn value in 2020, 19.3% more than 2019, and it predicts that the industry will worth $2.4tn by 2024.
Read more about financial services firms tech response to Covid-19
- TSB took just five days to design and implement a smart digital agent to answer customer questions during the Covid-19 pandemic.
- Nationwide Building Society is the latest financial services company to quickly automate customer services related to Covid-19.
- Building society initiates more automation software to cope with growing demand for mortgage deferrals amid Covid 19.