The “bank of me”
There’s no doubt that generative AI, and especially ChatGPT, is the biggest tech innovation of 2023.
For me, enhancing the customer lifecycle is the most exciting and impactful use of AI
It’s difficult to avoid it, whether you are reading your favourite tech or banking newsletters, attending a conference or just browsing social media.
So this week, I’m going to add to the growing dialog around the role of AI, but with a focus on the customer journey.
Introducer
Every person’s banking journey starts with a need: to transact, save, invest or borrow. As such, bank websites market products to meet these financial needs. Increasingly, consumers have used comparison sites to find the best product/deal. These sites earn their money simply by taking a margin or introduction fee from products found and purchased on their site. Customers are saved from going to individual provider websites, which is why these comparison sites are often referred to as “aggregators”.
However, with hundreds if not thousands of products on the market, predefined search criteria are limited in guiding customers to the right product. With the right data sets, generative AI could be used to help them find the product they’re looking for. For example, customers could search: “Which stocks/shares ISA pays the highest interest on cash balances and has the lowest trading charges?” However, introducers need to be careful about providing “advice”. More on this later.
Transactor
Today, customers have a wealth of “channels” they can use to make transactions, and many banks have already provided AI-driven chatbot services for a number of years. However, these bot services tend to be similar to internet or mobile banking services, simply replacing a screen action or form with a conversation that asks for the data required to complete the transaction. I’ve yet to find one that could understand a command such as “create a regular payment to my savings account on the last working day of every month using 50% of any positive balance in my current account”, or, “transfer money from my savings account to my current account whenever required to ensure I never have a balance less than £100”.
Advisor
Being a financial advisor is challenging for a number of reasons, the primary one being that you need to ensure that regulations around financial advice are met. And from an AI perspective, ensuring there is no bias in the advice is also key. The best way forward with AI is to first specialise on individual products (like a special-purpose AI) before looking at broader advice (a general-purpose AI).
For example, Abaka.me provides AI for savings and pensions. Financial advisors will typically argue that “financial advice” is just as much, if not more, an emotional decision as a financial one. However, Abaka.me already profiles customers on a wide range of data points, including behavioural, social, emotional, financial, health and traditional personal data.
Personal assistant/coach
For banks, the three previous points are the three dominant areas of focus. However, Bank of America has already started the journey towards “lifestyle coaching” – albeit for me, it offers quite a rudimentary capability. Others had started out on this journey much earlier as well, such as Albert. However, like a few others, Albert now combines its app with human advisors. For me, there are some apps that help with lifestyle journeys that could incorporate AI to create a special-purpose AI.
For example, FirstHomeCoach provides both educational content and a marketplace of third-party solutions for first-time house buyers. This incorporates not only solicitors and lenders but also things like moving companies or saving for a deposit. Aside from benefitting customers with a conversational interface, AI could also be used to make recommendations using a broader data set, like Abaka.me has done.
The “bank of me”
During my time at Temenos as the company’s chief digital officer, I had a video created to visualise what customer interactions with a bank in the future might be like. It showed a range of devices, conversational dialogue and screens where necessary. The service was highly personalised and incorporated data and services from third parties so entire “lifestyle journeys” could be managed and not just the financial services elements. The video is still available here. It’s about five years old now but I think it’s still very relevant.
There is a scene with a customer out jogging who asks, “So where have all the banks gone?”. The response from the AI is, “I am a bank,” and it goes on to explain how the bank is using her data to personalise her service and be a personal assistant. Later, the assistant helps another customer decide on whether to buy a dog or not by helping her understand the financial and health benefits of owning one.
In my last venture, AskHomey, we imagined the service helping people to understand how their house could be made more energy efficient. This was not the basic service available on many sites now. It would go further to understand floor space and whether carpets, wood floors or stone floors were best, the payback period for new windows and more.
This week, I’m just saying that whether we like AI or not, whether we think it can lead to a dystopian or utopian future or not, it is here and it is now. The best time to incorporate it was yesterday, the next best is today. There are many more ways that AI can be incorporated, especially internally, but starting with the customer lifecycle (advice, sales and service) for me is the most exciting and impactful use of AI.
About the author
Dharmesh Mistry has been in banking for more than 30 years both in senior positions at Tier 1 banks and as a serial entrepreneur. He has been at the forefront of banking technology and innovation, from the very first internet and mobile banking apps to artificial intelligence (AI) and virtual reality (VR).
He has been on both sides of the fence and he’s not afraid to share his opinions.
He founded proptech start-up AskHomey (sold to a private investor in spring 2023) and is an investor and mentor in proptech and fintech. He also co-hosts the Demystify Podcast.
Follow Dharmesh on Twitter @dharmeshmistry and LinkedIn.
Read all his “I’m just saying” musings here.
