Deloitte research outlines how AI is reshaping the industry
Artificial intelligence (AI) is rapidly changing the way industries develop and progress, and the financial services industry is no exception.
According to a new World Economic Forum and Deloitte report, the industry is using AI to attract and retain customers, and it will necessitate new models of collaboration amongst competitors.
In New Zealand, there are a number of banks launching or planning to launch AI customer service offerings, but this is just the tip of the iceberg, according to Deloitte New Zealand partner and banking sector lead Marco Ciobo.
He said, “AI in the back office will dramatically impact banking and insurance operations, from credit decisions to investment advice. However, focusing exclusively on the capabilities that AI offers risks missing the fundamental shift that is occurring.”
The report entitled The New Physics of Financial Services identifies four core findings that explore how AI is radically transforming the front- and back-office operations of financial institutions. These include:
- Cost centres to profit centres – AI enabled back-office functions will allow financial institutions to turn their centres of excellence into services, while pushing them to outsource most other capabilities;
- A new battlefield for customer loyalty – AI is giving rise to a new set of competitive factors on which financial institutions can distinguish themselves to customers. These include optimised financial outcomes, user engagement and data access, and curated ecosystems;
- Self-driving finance – AI enables this vision in three key ways: empowered platforms which can compare and switch between products and providers; increasingly personalised advice based on data; and continuous optimisation through algorithms which will automate most routine customer decisions;
Collective solutions for shared problems – Collaborative solutions built on shared datasets will radically increase the accuracy, timelines, and performance of non-competitive functions, creating mutual efficiencies in operations and improving the safety of the financial system.
