In the ever-evolving landscape of the financial services industry, integration of Artificial Intelligence (AI) has become more than a mere trend; it is now a necessity. As businesses in the banking, financial, and insurance sectors have recognised, AI is a powerful tool that can revolutionise their operations, enhance customer experience, and drive growth.
The rapid pace of tech adoption in the BFSI space is due to the need for companies to remain ahead of the curve by responding to the growing reliance on digital operations by consumers.
K V Dipu, Senior President, Bajaj Allianz General Insurance Company explains that the ever-evolving tech landscape is set to witness rapid change as AI becomes a key component of the operations of the BFSI sector.
“Regulatory initiatives and industry collaboration have driven increased tech adoption, especially in the context of multilingual capabilities, enhancing overall accessibility,” he said.
Hyper-Personalised Service Across No-Touch to High-Touch Points
One of the most significant impacts of AI in the financial services industry is the ability to offer hyper-personalised services to customers. AI-powered algorithms can analyse vast amounts of customer data, enabling financial institutions to tailor their offerings to individual preferences. Whether it’s a no-touch digital interaction or a high-touch in-person engagement, AI ensures that each customer receives a banking experience uniquely suited to their needs and preferences.
Akhil Almeida, Head of Marketing, Aegon Life Insurance Company adds that advanced technology, particularly AI-driven underwriting, has streamlined routine processes, providing real-time customer assessments without extensive documentation or medical tests.
AI-powered chatbots, for instance, can provide instant responses to customer queries, guiding users through simple tasks and transactions. On the other hand, individuals can enjoy personalised financial advisory services, leveraging AI-driven insights and recommendations. This hyper-personalisation not only enhances customer experience but also fosters loyalty and trust.
Digital is no longer the future but the present, enabling faster resolution and better retention of customers in a competitive landscape, says Geetanjali Chugh Kothari, CMO, Future Generali India Life Insurance.
Using Data to Offer Proactive Recommendations:
Data is now the lifeblood of the financial industry. AI algorithms can analyse historical customer data and real-time information to offer proactive recommendations. AI can predict the next best financial product for a customer based on their spending habits, investment portfolio, and life goals. These recommendations are data-driven, highly targeted, and uniquely designed to benefit the customer.
Geetanjali Sachwani, VP & Head of Marketing, Franklin Templeton Asset Management is of the opinion that hyper-personalisation has become paramount, more so among the new generation of investors entering the markets.
“This shift compels businesses to leverage customer data platforms for personalised web experiences, communication channels, and efficient resource allocation,” Sachwani informs.
Companies can leverage AI to upsell and cross-sell financial products effectively. By understanding customers’ needs, AI-driven systems can recommend suitable insurance policies, investment opportunities, or credit products, creating a win-win situation for both the customer and the financial institution.
Fostering Customer Engagement to Drive Targeted Growth:
In the digital age, customer engagement is paramount for financial institutions. AI plays a critical role in not only acquiring new customers but also retaining existing ones. AI-powered chatbots and virtual assistants provide round-the-clock support, reducing customer wait times and ensuring timely assistance.
Pankaj Gulati, CMO, Fincare Small Finance Bank believes technology is an enabler that has put a lot of power in the hands of both consumers and corporates, besides expediting India’s financial inclusion journey.
AI can engage customers through their preferred touchpoints, be it mobile apps, social media, or in-branch interactions. This omni-channel engagement ensures that customers have a consistent and seamless experience, building trust and loyalty. The use of AI in customer relationship management (CRM) systems allows financial institutions to segment and target specific customer groups with personalised offers and services, driving growth and revenue.
Responsible, Humane Technology: Why the Ethical Use of AI Matters
The ethical use of AI is crucial to maintaining trust and integrity in the industry. Financial institutions must prioritise transparency and fairness when implementing AI algorithms.
This includes safeguarding customer data, ensuring data privacy, and using AI for responsible lending and risk assessment. Additionally, addressing bias in AI algorithms is paramount to avoid discrimination and ensure fairness in financial decisions.
Sai Narayan, CMO, Policybazaar.com says that the rapid adoption of technology by consumers is undeniable, and its ethical use is of paramount importance.
Ensuring Trust While Using AI
Sonali Kalyanikar, RVP, Salesforce explains that integrating systems and leveraging AI, combined with trust-building and human intervention, leads to a seamless customer journey and superior experiences.
Trust is the foundation of the financial services industry. As AI becomes more intertwined with everyday financial activities, building and maintaining trust is of utmost importance.
Sourabh Lohtia, Head of Marketing, PNB MetLife adds that personalisation builds trust and captures value for institutions. “Collaboration, such as combining insurance and banking, enhances the personalisation experience by predicting and delivering fitting recommendations, ensuring the customer’s true needs are met,” he says.
Moreover, it is essential to ensure the security and reliability of AI systems to protect against data breaches and fraud. By incorporating AI in fraud detection and prevention, financial institutions can strengthen their security systems.
The financial services industry is undergoing a digital transformation that leverages AI to provide hyper-personalised services, data-driven recommendations and enhanced customer engagement. By focusing on these key points and ensuring trust in AI-driven processes, financial institutions can shape a future that is not only customer-centric and trustworthy, but also one that ensures better business outcomes and higher growth.
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Disclaimer: This article has been produced by ET Grey Cell.