Alex Kreger, UX strategist and founder of the financial UX design agency UXDA, increases the value of banking and fintech products in 36 countries.
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In just two months after launch, ChatGPT, powered by GPT-3, reached 100 million monthly active users, becoming the fastest growing app in history, according to a UBS report (through Reuters). ChatGPT is a language model that uses natural language processing and artificial intelligence (AI) machine learning techniques to understand and generate human responses to user queries.
I compare the appearance of GPT to the launch of the Internet in terms of its impact on the future of humanity. It enables machines to understand and generate language interactions in a revolutionary way. GPT (generative pre-trained transformer) AI could disrupt the way we interact with technology, just like the internet did.
It’s only been about two months since launch (at the time of writing), but we can already see how much ChatGPT affects our experience. The internet is full of examples of crazy prompts to which ChatGPT and other large language models (LLMs) often give accurate and competent answers. People are quickly adopting ChatGPT and similar models for uses such as content creation, programming, teaching, sales, education and so on.
The main question for me, as a financial UX strategist and founder of a company that includes conversation banking, is how such technology will impact the banking and financial customer experience: because customer experience is key to business success in the digital age.
According to a North Highland survey (via Consulting.us), 87% of leaders surveyed saw CX as a major growth driver. Strengthen research found that 86% of consumers would leave a brand they were previously loyal to if they had just two or three bad customer service experiences. An Accenture study 2018 found that 91% of consumers are more likely to buy from brands that recognize, remember and provide relevant offers and recommendations.
To secure a primary competitive advantage, the customer experience must be contextual, personal and tailored. And this is where I think AI will become the breakthrough technology that will support this goal. According to a research by The Economist Intelligence Unit77% of bankers believe the ability to unlock the value of AI will be the difference between banks’ success or failure. In a 2021 McKinsey Survey56% of respondents report using AI in at least one function of their organization.
I predict that LLMs and AI will impact the user experience in the banking industry in multiple ways.
First, they can analyze customer data to understand their preferences and needs and use this information to provide personalized customer service and support to users by addressing their questions and concerns in real time. Banks could also use AI models for tailored financial advice, targeted product recommendations, proactive fraud detection, and short support wait times. AI can guide customers through onboarding, verifying their identity, setting up accounts and advising on available products.
Second, AI can automate many routine tasks, such as querying account balances and resetting passwords, freeing up customer service reps to focus on complex issues. It could increase efficiency and reduce costs for banks, while providing faster and more accurate customer support. And all this would be available 24/7, making it easy for customers to get help by answering questions, solving problems and providing financial education outside of regular business hours.
Third, companies could use AI to provide a conversational banking experience by integrating models with banking applications to provide a single point of contact for users to make transactions, view account information, and receive alerts through the chat or voice interface in multiple languages. It could simplify the user experience and reduce the complexity of banking operations, making it easier for even non-native speakers to use banking and financial services worldwide.
So, what are the obvious use cases for AI and LLMs in banking?
1. Account Questions
Bank users can use chatbots to check their account balances, transaction history, and other account-related information.
2. Money Transfers
Users may be able to transfer funds to other accounts or pay merchants through a chatbot.
3. Loan Applications
Banks can use chatbots to help users apply for loans and guide them through the application process.
4. Credit score monitoring
Companies can develop chatbots to help users check their credit and give advice on how to improve it.
5. Financial Advice
Banks could train chatbots to provide investment information and help users make informed investment decisions.
6. Fraud Prevention
Banks could explore ways to use AI to prevent fraud by monitoring user transactions and spotting unusual activity.
7. Customer Service
Banks could train chatbots to provide fast and effective customer service by answering frequently asked questions and solving simple problems.
8. Account Management
Banks could train AI models to help users manage their accounts by arranging automatic payments, changing personal information, and more.
9. Insurance Claims
Banks could also create chatbots with the ability to submit insurance claims and get information about the claims process.
10. Financial Planning
Chatbots can help users with financial planning tasks, such as budgeting and setting financial goals.
Challenges and considerations for banks
Despite the inspiring prospects that AI technology holds for improving the customer experience in banking, its implementation in banking products can pose a number of challenges. One of the biggest challenges is ensuring the security and privacy of customer data. Banks must ensure that their chat interface is secure and that sensitive data is protected from unauthorized access or disclosure.
Another challenge is training an AI model to language and terminology specific to the banking sector. Banks must provide relevant training data and integrate the model with their existing systems to ensure it can provide accurate and appropriate responses to user queries.
And another challenge is customer acceptance. Banks should ensure that customers are aware of and familiar with the chat interface and its benefits. This requires them to make additional product UX design considerations and invest in education efforts to provide a user-friendly chat interface.
Thanks to natural language processing capabilities and insight into customer data, AI could become an excellent solution to provide a more personalized, efficient and convenient user experience in banking and financial services.
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