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Company Updates, Experience-Driven Transformation March 13, 2019

3 Insights on the Future of Digital Finance

Last month, the aeqbanking team attended Future Digital Finance, a conference focused on digital banking trends in Florida. The event highlighted topics in next-generation digital banking innovation with speakers from HSBC, Wells Fargo, and US Bank. It was not your typical conference with speakers addressing thousands from the stage. Instead, this event took a hands-on approach with small breakout groups called mixers. The mixers enabled closer conversations between the speakers and attendees, and a chance to dive deep into the themes of each session. It was an enlightening experience that validated our research and values at aeqbanking. Here are our top three insights from Future Digital Finance:

1. Welcoming the Disruption of AI

Artificial intelligence, or AI, is making a huge impact on our society today. Mobile phones like Google Pixel 2, for example, incorporate processors with deep learning capacity based on neural network image processing units powered by machine learning. The banking industry is not far away in this domain. In banking, we are seeing early adopters experimenting with AI to improve customer experience. At the conference, we saw one specific example of how a bank is using conversational AI to improve customer experience by deflecting simple customer inquiries, such as branch locations and hours, so that call centers can handle more complex issues.

It is still the early days, with one off-the-shelf AI platform providing 50-55% accuracy. Concepts, however, have been proven, and with more work, we will surely see more banks and credit unions providing more meaningful experiences using AI technology.

 

2. Big Data

While data insights are a major driving factor behind decisions made by social media and retail companies, the financial services industry seems to fall behind using only a small fraction of their data to make decisions on new services and offers. Banks and credit unions have a history of legacy systems that make data utilization complicated; however, focusing on big data as a priority can significantly differentiate one bank or credit union from another.

Ruby Walia, EVP and Head of Digital Banking at HSBC North America, highlighted the fact that while social media companies can only infer where their users spend their money, based on their online viewing habits, banks actually know where their customers are spending their money. He said, “banks have the most valuable data and if used responsibly with their customers’ consent can use data to provide thoughtful suggestions and delightful experiences for customers”.

We’ve seen tremendous success in applying our cross-industry experience towards the banking industry. After seeing the success of user experience design transform industries like retail, for example, data can be the next big win for banks and credit unions in North America.

 

3. Holistic Financial Health

We know that money is the biggest source of stress in people’s lives. This is because people are more concerned about their financial health than about any other area of their lives. In a 2017 study by Fiserv, out of over 3000 US adults surveyed, 39 percent said they would struggle to pay back a $500 loan and if given $1000, would use this money to repay a debt. During a fireside chat with Elizabeth Kelly, SVP of Operation at United Income, and Daniel Sanford, VP of Digital and Innovation, the two raised the importance of having a holistic health picture for customers who are not financially savvy. They asked, “how do we support customers to make the right financial choices?” The answer is that banks need to provide customers with tools to help them make the right decisions at every stage in their life.

This has been a topic of importance at aeqbanking, where we provide a customer experience assessment and 360-degree client view through customer journey mapping, insights, research, and analytics. This process allows us to understand real customer needs before at every stage in a customer’s life, offering a personalized solution that meets the needs of each customer experience.  

 

Shaping the Future

The conference gave ample insight into the future of digital finance. What will be most interesting is to see how these predictions unfold. Where will AI innovation take us? Will banks and credit unions find a way to preserve their legacy systems and optimize data for their customers? And will banks and credit unions create experiences that address holistic financial health in a way that truly benefits their customers at every stage in their life? As specialists in experience-driven banking, these are our areas of expertise and we look forward to helping our clients shape the future of digital finance.

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