Gartner callsOpens a new window out two aspects of digital transformation. The first is digital business optimization, which includes improved productivity, revenue, and customer experience. The other is transforming the business through net-new products and services and new business models. These, in addition to the judicious use of AI use cases, can help simplify and improve the customer journey and deliver sustained gains.
Over the years, the world of banking has undergone a sea change, driven by technology. In any industry, the primary driver for digital transformation efforts is the quest to find tools to solve contemporary problems. For instance, technology today has evolved considerably, giving businesses access to a host of tools and concepts such as API, cloud, low-code/no-code software, AI, etc. Not only will banks benefit greatly from using these tools optimally, but failing to adopt them could leave them trailing behind competitors. AI offers new and innovative functionalities that are impossible to achieve using rule-based techniques.  Â
AI adoption Can potentially be a huge driver for change and can bring a paradigm shift in the banking ecosystem. Nations Trust Bank, a progressive bank in Sri Lanka, is a great example. Using Robotic Process Automation (RPA), the Bank decided to automate several manual processes to improve efficiency and accuracy and free up employees for value-adding tasks involving creativity, decision making, and innovation. Automating just three initial processes helped free up 180 person-hours per month. In addition, the Bank witnessed a 25 – 50 percent saving in processing time.
As per a report by Business Insider, nearly 80% of banks are aware of the potential benefits that AI presents to their sector. Therefore, banking and finance institutions are swiftly moving towards AI to improve efficiency, service, productivity, and RoI and reduce costs.Â
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Aligning AI with Business PrioritiesÂ
Given the near-limitless use cases for AI and automation, choosing a well-thought-out approach to AI adoption aligned with business priorities is key to achieving maximum impact. For banks, for instance, the three biggest performance indicators are the top line, bottom line, and customer experience. Not only are these highly quantifiable, but they can also be audited independently by third parties. Â
At the same time, it is also critical to find the right pivot to plan the AI and automation journey. Banks might focus on transforming backend operations or customer-facing operations, for example. One effective way to create an effective AI/ automation journey is to map digital transformation efforts in alignment with the customer journey. A bank’s customer journey broadly falls under the buckets of marketing/prospecting, sale/ onboarding/ origination, transaction servicing, and support.Â
The idea is to reimagine each stage of this customer journey in the context of the capabilities that AI offersOpens a new window . Broadly, AI can help augment various human capabilities such as vision and listening or the ability to understand natural language and arrive at the intent. It is also capable of decision-making, such as suggesting decisions based on continuous learning and actions, such as understanding and executing instructions, making sense of events, and recognizing voice or speech.Â
Again, given that each stage of the customer journey involves thousands of processes, banks need to choose a specific task or group of tasks that they have chosen to execute automation or AI. In such a scenario, applying various prioritization techniques and choosing processes with the highest impact is beneficial. For example, you might choose processes that help eliminate paperwork or require efforts from more than one person, or are time-consuming. In the case of Al Ahli Bank of Kuwait (ABK), which is among Kuwait’s leading banks, the Bank decided to automate salary processing for its small business customers. Manual salary processing required up to a week and was riddled with errors and dependencies. Automation allows the Bank’s core banking platform to digitize salary details using a QR code. The solution executes 95 percent of requests, with staff stepping in only to handle exceptional cases. With this, the salary processing time is down by an impressive 97 percent.Â
Recognizing Context and Priorities
Each aspect of business brings in different areas of prioritization. For instance, from a customer point of view, the VIP keywordsOpens a new window of visibility and visualization, immediacy, and personalization are important. For data, what matters is visibility and visualization, ‘integrated’ data, and purpose. Also, context is extremely critical. For example, for a hospitality or travel business, if the bank’s ML algorithm only considers data from the last two years when business was down due to the pandemic, it might come to the conclusion that no hospitality business is a good candidate for a loan. Without a broader context, the insights gained purely from the data can be distorted.
Another important aspect of AI that applies horizontally across all use cases is ensuring data privacy and security. In a banking context, banks store a vast volume of personal identification data such as name, address, etc., and sensitive data such as credit history, bank balance, etc. Ensuring data privacy as well as putting measures in place to ensure it is safe against cyber-attacks should be an important aspect of all AI algorithms.Â
Today, most banks understand the critical role of digitization and AI in building a future-ready business. Digital transformation efforts are often mandated by leadership. However, the path isn’t always clear when it comes to implementing AI tools on the ground. Often, it is easy to get swayed by trends and buzzwords in AI and go after the latest shiny object. Therefore, a structured approach that is aligned with business goals and the customer journey can help streamline efforts and deliver maximum impact.Â
What steps have you implemented to streamline your business processes using AI? Share with us on LinkedInOpens a new window , TwitterOpens a new window , or FacebookOpens a new window .