Published : 6 years ago, on 29/05/2019

By Rob Walker, Vice President, Decision Management & Analytics at Pegasystems

Rob Walker, Vice President, Decision Management & Analytics at Pegasystems

At the moment, it seems that everyone, everywhere is talking about artificial intelligence (AI). There’s no escaping it –AI is no longer confined to futuristic sci-fi blockbusters or computer laboratories. It has woven itself into our daily lives. From virtual assistants on our mobile phones and laptops to more advanced machines that effortlessly outwit humans when playing complex games like Go, artificial intelligence is already here today. There is, however, huge untapped potential for financial services institutions. A study[i] carried out earlier this year by Narrative Science, in conjunction with the National Business Institute, suggests 32 per cent of financial services executives already use artificial intelligence technologies, such as predictive analytics. But how can AI be used in a way that their customers will understand and appreciate?

Fear of the unknown

Using AI to truly add value to a business is more challenging that it may seem at first glance. Firstly, many customers don’t really understand what AI is. And in many cases, they don’t realise that they are actually already using it in their day-to-day lives. Pega recently carried out a global study[ii]of 6,000 consumers and discovered that just 33 per cent of respondents thought they had previously encountered AI. However,77 per cent of them said that they use technologies such as virtual home assistants, intelligent chat bots or predictive product suggestions – which all take advantage of AI.

This research points to quite an alarming gap in knowledge – if financial services consumers don’t know what AI is or how it is used, it could lead to developing negative perceptions or becoming fearful of using the technology when interacting with their bank in the future. This was reiterated by the survey, with just 35 per cent of consumers saying they feel comfortable with businesses using AI to engage with them. People tend to fear what they don’t understand, and this was certainly reflected in the study. 72 per cent admitted that they were fearful of the changes that AI could bring, with a staggering 24 per cent expressing concerns that the rise of AI will lead to robots taking over the world!

Reassuring consumers

This knowledge gap and resulting mistrust around AI poses a significant obstacle to financial services organisations if they are to use it effectively. To win customers’ trust, banks need to de-bunk the myth that AI is a futuristic and mysterious new invention and reassure them that there’s no reason to fear it.

A good place to start demystifying AI is by defining it clearly. Pop culture is often guilty of depicting AI as incredibly advanced, self-aware technology rising up against humanity, like something from The Terminator films. No wonder people are worried! Thankfully, the reality is far tamer. The term ‘artificial intelligence’ simply refers to computers and machines that are capable of intelligent behavior. These have been around since the 1980s as advanced business rule engines, data-driven predictive and machine-learning predictive analytics. If any organisation today boasts ‘innovation’ simply in investing in AI, then (provided they haven’t created something that’s capable of passing the Turing Test)either they don’t understand what AI means themselves, or they’re lagging behind the times.

This must begin by demystifying AI and educating customers on the many important benefits it can bring, especially when transforming the financial services industry. Pega’s study shows that almost 70 per cent of consumers are willing to embrace AI if it can make their lives easier. It clearly demonstrates that as long as the benefits of using it are explained fully, there is a tangible appetite for the technology. Customers shouldn’t be kept in the dark about AI; businesses need to proudly shine a light on the many different ways it has already benefited them, from better customer engagement to faster and more effective business operations. By removing the fear and confusion that currently surrounds AI, companies can become more open-minded about exploring the possibilities opened up by AI.

After all, the vast majority of your customers will – knowingly or otherwise – have already been relying on artificial intelligence to interact with businesses for many years now. They are engaging with AI on a daily business, whether that’s by using a customer service chat bot or simply receiving a personalised product recommendation via email. Financial services institutions need to prioritise changing the perception of what constitutes AI if they are to make full use of it in the future.

The future of AI

As the technology continues to evolve and is embraced by financial services institutes and consumers alike, a further myth that needs to be de-bunked is that humans are the benchmark against which AI behaviour should be measured. Much of the confusion surrounding the use of AI arises from the misconception that the experiences of interacting with machines should be measured against that of interacting with other humans.

Besides some specific applications – most notably customer service, where human interaction is key – it will become more and more important that businesses aren’t tempted to strive for “human-like” technology. In the near future, AI will be capable of vastly outperforming humans in a number of tasks in terms of speed and quality. This will result in them becoming able to add far greater value. However, financial services institutions must be careful not to play into the existing fear that surrounds AI by allowing their customers to assume that machines will ultimately replace humans. They need to focus on emphasising that the role of machines will be to support humans within financial services organisations to make them more effective and reach their full potential – not to overthrow them!To achieve this, and to experience the wide variety of tangible benefits that artificial intelligence offers, it is critical to educate your customers now. They’ll be able to embrace the future once they really understand the vast potential of AI.

[i]“The Rise of AI in Financial Services.” Narrative Science, narrativescience.com/Offers/The-Rise-of-AI-in-Financial-Services. Accessed 19 June 2017.

[ii]“What Consumers Really Think About AI: A Global Study.” Pega, 14 Apr. 2017, www.pega.com/ai-survey. Accessed 19 June 2017.