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Is AI the way ahead for finance institutions?

There is rapid growth in the use of AI block chain technology, creating a secure and complete record of transactions, including cross border ones. At the same time, the use of Chatbots and other AI as an interface with the public is also on the rise.

Swift has been one of the agencies to include block chain in its development. Almost two thirds of banks are already working on blockchain technology. Social media giants, including Facebook, are also getting in on the action. When they allowed chatbots on to their Messenger application, it led to well over 30000 different companies developing chatbots for their own businesses.

Research backs up these conclusions. Three quarters of experts interviewed for the research believe, by 2020, well over half of companies in the banking sector will use artificial intelligence interfaces as their main tool for dealing with customers. Eighty per cent of experts also agree that this use of AI, which includes chatbots, will completely change the way companies deal with customers, and the information that they get from them. The research suggests that AI will be replacing human communication and pre programmed interfaces.

Over 70 per cent think that AI will become the ‘brand’ image of their organisation. Beyond just the experts, financial organisations themselves believe that chatbot technology is improving at such a rate that the little AI communicators will be able to provide a workable alternative to present technologies within a couple of years. In fact, the research indicates that already half of institutions are working on chatbot technologies with a view to making use of them, ideally before the end of the decade.

The world’s leading information technology research and advisory company, Gartner, estimates that 85% of customer communications will be managed by something other than human contact: astonishingly, this figure is for the year 2020 – so just three years from now.

A number of experts spoke to Finder.com about the speed and viability of these developments. Faisal Khan is an expert in cross border money transfer. He accepts that, whilst there is still much work to be done, chatbots are likely to be the answer, at least in the short term. This is because of their ‘human’ nature. One of the problems of using different technologies to customers is the difficulty of explaining changes to process, but because the chatbots come across as virtually human, people either accept them, or even do not know that they are not communicating with a real person.

However, in terms of currency Khan does see a natural limit for the use of bit coin, as he believes the existence of established currencies is just too strong. This is partly supported by a study from 2015 for the World Economic Forum, which predicts 10% of global finance being stored through blockchain by 2027.

Fintech specialist, Duena Blomstrom, takes a slightly different view. She believes that
technological developments are going to be significant, but will be much broader. It will all
be about customer engagement, with those technologies that best gain customer support
being employed by the financial institutions. She also has the view that location will also
play a role. With half of banks already working with fintech technology, her views do
carry a lot of weight.

She does agree that Chatbot technology will become more significant, but, contrary to the
research findings above, has the view that they will perform just one part of an overall trend
of increased technological use, taking the repetitive and mundane elements away from
finance.

It is easy, when thinking of finance matters, to exclude the developing world, but when this
entity is considered, it emerges that only a third of the adult population of the world makes
use of existing finance institutions. There is, therefore, an enormous market out there who
have no preconceptions regarding banking systems.

Leon Isaacs, CEO of the Developing Markets Associates, recognises this. He points out that
19 out of 20 transactions make use of cash, and it is the infrastructure, or lack of it, that
minimises the amount of people automating their finances. He therefore feels that, whilst block
chain will be a significant development, its impact will be limited.

So, there are similarities and differences between the views of experts who spoke to
Finder.com, and the research on which this article is based. What does seem consistent,
however, is that chatbots and other AI formats are here to stay.

2017-07-27

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