The most discussed topic of the year at the recent Web Summit 2023 in Lisbon was artificial intelligence. Many experts have expressed different opinions, enthusiasm and concerns about the impact of AI on a variety of industries and areas of our lives. But it seems to me that everyone agrees on one thing: with the generalization of AI, humanity has reached a historic milestone.
After the phenomenal success of ChatGPT, everyone agrees that AI will have a drastic impact on our lives over the next five years. And banking services will be no exception.
This is due to the large gap caused by limited human capabilities. If we look a little further, we can see the disruptive prospect of AI that will go far beyond ChatGPT, completely transforming the digital customer experience and even providing superpowers to humanity.
Yes, it hasn't happened yet, but we should start thinking today about how this could affect tomorrow's financial businesses. The main question is not “what if”, but HOW exactly it will affect us and HOW we can prepare for it.
The impact of AI in the banking sector
Banks already collect a lot of data about their customers, but to harness the full potential of this information requires a new level of technology. This could be the holy grail on the path to solving customer pain points and meeting their needs and desires.
If we were able to process all this data correctly, we could offer customers a personalized solution at exactly the right time. Unfortunately, this is not yet fully available. This is a huge job, impossible to do manually.
The enormous amounts of data already collected are just the beginning. The expansion of digital technology will provide all financial institutions with tons of additional data. It will be collected from users' smartphones, social networks, utility APIs, third-party financial services via open banking APIs and even everyday gadgets connected to the IoT (Internet of Things) network via 5G.
It is a fact that with this type of sources, the amount of data will grow rapidly. Due to its volume, we would need a superhero to process all this information and, above all, make sense of it and use it wisely. This is where AI could become our savior in the next five years.
As a result, this will help banking services infiltrate customer privacy at a much deeper level to provide personalized information and user experiences at a whole new level. Soon we will see the impact of AI in banking experience areas such as:
Personalized offers
Using AI for more accurate customer credit scoring based not only on the bank's profile and credit history, but also on social profiles and offline activity will provide personalized proposals for each customer . It also reduces risks for the banks themselves. This could make it quick and easy to meet user needs with the right product, at exactly the right time, when a person needs it.
Investment
To eliminate human irrationality from investment decisions, AI will analyze several business and market factors to predict business success.
Security
AI will move most of the technical aspects of verification to the background. This will build trust in digital banking and bring it closer to people without the need to confirm their identification at every step.
Advisory
AI will help better understand the pain points and needs of each customer by calculating forecasts based on individual profiling and big data processing. Such forecasts will help customers regain control of their finances by making better decisions and adopting healthier financial behavior.
Support
AI bots will provide frustrated users with instant solutions that are not generalized and useless but tailored to the specific needs of the customer.
Alternative treatment
AI will help enable banking using alternative interfaces, such as voice, gestures, neuro, VR and AR. This will enable the integrated implementation of banking solutions into the different experiences of every human being connected to the digital space.
AI may be the hottest tech topic right now, but I think conversational banking, drones, or chatbots aren't even close to the true potential of AI. In my opinion, AI should not be associated only with these topics, because it would be like buying the most expensive iPhone to use as a nutcracker. I dare say that the true power of AI could possibly change the entire paradigm of humanity's life.
Big Data is getting even bigger
To harness the full potential of AI, we need to explore it from a broader perspective. Do you know how much data we currently generate? According to IBM, 90% of the world's current data was created in the last two years.
Every day we produce 2.5 quintillion bytes of information through our smartphones, computers and other gadgets.
This could represent 750 times the entire content of the Library of Congress, every day… And, in 2030, this volume will be much higher thanks to IoT.
Soon, sensors will be everywhere, generating even more data about everything from weather conditions, buildings and vehicles to, of course, us… humans.
Currently, analysts use advanced tools to generate, collect and exchange data, but, due to the rapid increase in volume, it is still difficult to properly analyze and obtain valuable insights that data can provide.
Currently, only scientists and major technological engineers in this field are equipped with sophisticated algorithms and computer systems capable of establishing connections in only a limited number of settings. These are significantly affected by human perception models, as we are physically and mentally limited in processing such an amount of data.
We could say that there is nothing new in the use of AI in big data analysis, but what if it was a tool accessible to everyone and not just scientists?
The Holy Grail of Unanswered Questions
There are so many scientific, intellectual and existential questions that we ask every day: how to cure deadly diseases, what is the meaning of life, how to create the most successful business… and so on. What if AI was the Holy Grail with all the answers?
What if each of us could use AI to predict the consequences of each of our decisions, providing push notifications on how to act? These guidelines would be based on thousands of data parameters collected from billions of people and analyzed by AI with the aim of finding meaningful connections and cross-influences in your specific case.
From a financial perspective, an AI advisor could predict the outcomes of our decisions before we even make them, saving us from drastic failures, irrational behavior and loss of self-esteem.
AI could identify hidden connections that have a critical effect on our well-being, taking into account all the huge data collected in our profile by banks and the Internet of Things compared to other users.
Imagine that your personal AI advisor recommends taking specific online courses because he or she has detected that they bring revolutionary ideas to similar users and could thus increase your wealth. Or, it could provide specific steps to organize your cash flow to reduce the level of stress detected by smartwatches.
Another example: AI analyzes all the data about your health and daily habits and is able to clearly predict that, if you do not change your diet and exercise regime, you have a 90% chance of getting a disease specific cardiac in just two years.
Or, your social networks might recommend five people who could become your closest friends, based on an in-depth analysis of interests, mutual friends, activities, habits, posts, etc.
And this is not fiction or vague hypotheses. Deep Thought, the supercomputer programmed to solve the “ultimate question of life, the universe and everything else” from The Hitchhiker's Guide to the Galaxy, could become a toy accessible to everyone thanks to advanced AI, based on big data.
This type of advanced AI will be freed from the restrictions of the human brain and will be able to find correlations of types of data that we would never even think to analyze. This will provide groundbreaking insights into biology, technology, finance, physics and our personal lives.
The incredible amount of currently useless data will become a valuable source of information for each of us and, of course, for entrepreneurship. It is a way of realizing not only the potential of each person but that of all humanity.
The future is near
Of course, this approach to using AI can have its dark side. For example, people will be able to ask their AI assistant to find ways to influence the opinions and decisions of others. But every coin has two sides; it's a question of management.
I believe the implementation of AI will start with the automation of some basic processes similar to those I mentioned in the introduction to this article. Very soon, you will see many AI agents from ChatGPT that cover different topics, as well as a full range of AI solutions as powerful features in different applications, services and segments, including banking.
The most interesting thing is what will happen in the next stage when AI solutions move beyond banking, healthcare or the Internet of Things to AI personal advisors similar to that of Blade Runner 2049.
It will aggregate all the data from all your accounts, activities and aspects of life to generate and provide valuable information on the go and support you as a personal technical assistant. And it will have a huge impact on businesses (as Google's contextual advertising did before), as AI will become a next-level contextual advisor.
So, when technology becomes more and more advanced, we will experience a much more serious impact than we could ever imagine. Through AI, ordinary people will have the ability to make more effective and impactful decisions in their daily lives using appropriate information extracted from data collected by all of humanity.
Such an impact will enable a transition of human capabilities beyond the limits of our brain and rationality to help us become supernatural beings.
The full potential of AI is immeasurable, we can only speculate. The companies that are able to humanize AI and use its power to solve people's problems will be the ones that conquer the market of the future. These are companies that combine technological advances and innovations with knowledge of user experience, working closely with UX architects to create a completely new experience.
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