Marketing—even the best marketers can become victims of a faded ROI. It usually happens when you pick an incorrect marketing strategy or implement it into your marketing model. Due to this, it becomes evident that your business will witness a considerable ROI loss.
What if there were efficient ways to evaluate the right marketing practices before implementing them into your business?
The time has come to implement tech-based marketing practices and actions into the marketing space! In this aspect, AI in finance is integral. Banks, financial institutions, businesses, and service providers need to deploy AI at scale to remain relevant to their business module, automatically improving ROI generation.
So, how can the C-suite use the power of AI in banking and finance marketing
to increase or improve ROI?
This article will help C-suite executives like you understand how AI can generate ROI by implementing it correctly.
Why Banks Must Become AI-Enabled?
McKinsey estimates that AI technologies can increase valuation by $1 trillion in global banking each year. According to a Business Insider survey, the potential cost savings and ROI for banks from AI applications will be $447 billion by 2023.
AI Challenges that Coursed with Time
Many banks have even struggled to scale AI across the entire marketing model beyond experimentation. This struggle was due to a lack of a strong AI strategy, fragmented data and uneven data management systems, obsolete operating models, and inflexible and investment-starved technological strategies
The Rising Scenario of AI in Banks
Several digital engagement trends
and technologies stood out during the pandemic. It would be wrong to disagree that businesses are now in the AI-driven digital era. This helps reduce data storage and operational costs, improved connectivity and accessibility of networks, and other rapid advances in AI for finance.
Based on the benefits of artificial intelligence in business, the technology leads to better automation and risk mitigation, which can often outperform human decision-making in terms of rapidity and accuracy. This results in boosting ROI.
Therefore, banks and financial businesses must become "AI-enablers” to compete and thrive. In addition, marketers should embrace AI technologies as the foundation for new and valuable plans to provide diverse customer experiences.
How Can Banks Become AI-Enabled?
Rethink Customer Engagement
AI in banking and finance marketing will aid in the development of personalized, hyper-personalized, and intelligent products and services with new features. The marketing attributes will add more intuitive interactions and advisory capabilities.
Make AI-Powered Decisions
According to Accenture's Banking Technology Vision 2019 study, about 78% of bank marketers believe that AI will simplify user interfaces, letting banks provide a more personalized customer experience.
This study paves the way for efficient AI-powered decisions for futuristic banks
. When banks use machine-learning models to interact with each customer in real-time, they can add value in four ways:
Stronger customer acquisition
Reduced operating costs
Reduced credit risks
Higher customer retention and valuation
Providing innovative financial services
By enabling AI in marketing strategies, banks can reap benefits from organizing their efforts by redesigning and building highly flexible and fully automated layers of decisions around four elements:
Scalable development and deployment of advanced analytics (AA) and machine learning (ML) models
Augmenting AA and ML models with “edge” capabilities to reduce costs, enhance and streamline customers’ or clients’ overall experiences
Leveraging AA and ML models for automation, mainly referring to personalized decisions across the customer life cycle and to target potential customers
Strengthen the Integral Technology and Data Management
This refers to the extraction of customer data based on their needs and requirements from various data streams to generate relevant and personalized services from a mass of unstructured data. The entire process necessitates data management
, which AI excels at.
Budding AI Opportunities for Increased ROI
In 2019, a report by Deloitte titled “AI: Transforming the Future of Banks” highlights the massive opportunities for AI in banking and finance. It further elaborates on how AI can transform the financial services industry. The research further mentions:
AI presents a plethora of opportunities for financial services organizations, who can better meet regulations, escalate their ROI, improve the customer experience by enabling personalization and leverage their growing data repositories."
Jim Marous, Co-Publisher of The Financial Brand and CEO of The Digital Banking Report
Let’s get some insights into the real-time budding opportunities for financial markets
in terms of AI.
Detection of Frauds
AI systems are particularly good at evolving fraud detection methods. Marketers benefit by detecting irregularities in the whole business cycle, which improves ROI generation. Irregularities such as expenditure, pricing, investments, and others can now be detected instantly with the help of AI.
Traders worldwide are experiencing a new trading landscape where AI-based trading decisions have become even more accessible. AI's ability to detect the most recent trading trends and market status based on relevant data is becoming the benchmark.
Using AI, traders can now create advanced portfolios and gain insights for various types of investors based on their risk tolerance, developing markets, and investment valuations. With the addition of AI, all of these lead to effective decision-making while trading, boosting ROI.
Smooth Customer Identification
Financial organizations such as Capital One and U.S. Bank are leveraging AI in their operations to identify their customers and provide their services worldwide.
AI can facilitate customer identification and authentication. This will automatically strengthen customer relationships, and marketers can provide personalized services
. But how? The answer is by using ML algorithms.
ML algorithms in AI monitor user behavior and derive valuable insights based on customer search patterns. These insights would aid bank service providers in providing personalized recommendations to customers, which would boost engagement and reflect on the ROI.
Lowering Costs and Increasing Revenue
According to Infosys, the leading opportunity for AI is in automating the frontline.
The benefits of artificial intelligence in business are automated engaging with customers and significant cost savings."
Virtual assistants for customers and back-office robotics will become an integral part of the operational systems of future banking.
AI in Banking: Organizing a Successful Future
You can’t deny that every change or revolution brings challenges with it. While some businesses still strive to implement AI in banking and financial services, they must look beyond the hype and consider practical applications of AI to increase revenue and create a cohesive and productive business.
The growing use of AI promises to impact the finance and banking industry long-term. AI in finance is making significant strides in implementation and adoption, which can accomplish more efficiently than legacy systems.
Frequently Asked Questions
What is the future of AI in banks?
In the future, AI will enable banking operations through alternative interfaces such as voice, gestures, neuro, VR, and AR. Incorporating these banking solutions will bring a new change and a whole new service landscape for customers globally.
Why do banks need AI?
AI necessitates streamlining banking operations to keep up with the fast pace of other businesses, especially in the aftermath of a pandemic. The transformation is required to boost ROI, provide greater levels of business valuation, reduce risks and remain competitive.
Is AI going to help the finance industry in the future?
The benefits of AI in the finance industry are promising. In most cases, it has increased business profits through efficient customer targeting, automation of repetitive tasks and processes, and faster services to end-users.