Artificial intelligence (AI) has emerged as a disruptive force across industries, and the financial services sector is no exception. Among the different AI technologies, generative AI—which involves creating new content or data based on patterns learned from existing data—is poised to revolutionize financial services.
Before beginning your own generative AI journey, it’s important to understand your use cases. Generative AI has the potential to solve many business challenges, but it’s not a cure-all. Knowing the right use case, the technology approach for the job, and the potential financial returns can help you make the right investments and deliver the desired benefits.
Exploring Generative AI Use Cases in Financial Services
Imagine having a super-smart assistant that can help spot risks, create savvy trading strategies, unravel data challenges, and navigate complex regulations. That’s not that far off from the potential generative AI holds for financial services. While there are a ton of possibilities, we see three distinct areas where generative AI holds the most promise.
Generative AI is emerging as a game-changer, especially for creating internal efficiencies. From automating complex tasks to optimizing resource allocation, and streamlining processes, generative AI use cases in financial services are particularly relevant when it comes to operational excellence. We’ve compiled just a few for you to consider in your own discovery process.
- Risk assessment and fraud detection: Financial institutions deal with vast amounts of data related to risk and fraud. Generative AI can help analyze historical patterns and identify potential risks, enabling proactive risk management and robust fraud detection.
- Automated trading strategies: Generative AI can analyze market trends and historical data to develop automated trading strategies. These algorithms can make data-driven decisions in real –time, leading to more efficient trading and improved investment outcomes.
- Data analysis and decision-making: Financial institutions generate copious amounts of data. Generative AI can assist in analyzing complex datasets, extracting valuable insights, and supporting better decision-making processes. This includes tasks such as portfolio optimization, credit risk assessment, and personalized financial planning.
Improved Customer Service and Product Enhancement
CX is another area that we see as being ripe for enhancement by generative AI. For many bank customers, and across industries, there’s not enough customer service to satisfy their needs. So, for example, financial portfolios sit underinvested, customer documentation goes stale, or customers remain unaware of investment opportunities. Here are three areas we see the customer journey and financial products benefiting from the potential of generative AI:
- Personalized financial services: Generative AI algorithms can analyze customer behavioral, demographic, and transactional data to develop personalized financial recommendations, tailored investment strategies, and customized insurance plans. This level of personalization at scale could fundamentally change the retail finance industry.
- Advisor assistance and chatbots: Generative AI-powered advisor assistance tools, chatbots, and virtual assistants can help address customer queries, provide financial advice, and guide customers through various processes. When combined with conversational AI and intelligent automation, generative AI has the potential to supercharge CX by leveraging the best features of these technologies to solve more customer issues, faster.
- Product innovation: Generative AI can be used to create innovative financial products and services that cater to specific customer needs. By analyzing customer data and market trends, financial institutions can use generative AI to aid the product development process, run different scenarios, and understand the risk and regulatory impacts of different product configurations.
Regulation and Compliance
In the complex regulatory landscape of financial services where adherence is a brand reputation risk, generative AI will become an invaluable tool for scrutinizing diverse data streams. Ultimately, these tools will lead to a more robust oversight mechanism, including:
- Compliance efficiency: Given the structured and text-based nature of regulation, financial institutions can ingest the various regulatory regimes they are subject to into generative AI models to identify specific areas of risk for a given product, service, or scenario—allowing faster review and increasing compliance.
- Regulator usage: Regulators can use generative AI to analyze product disclosure statements, financial reports, transactional data, market date, contracts, and other information available to them to identify compliance issues and breaches.
Without doubt, financial institutions need to have a strategy for generative AI that involves weighing the risks and opportunities and educating and enabling your employees on the technology. To truly take advantage of emerging AI trends, you need to first understand your business use cases and work towards realizing them across the enterprise. As the technology evolves, it’ll be critical to set your organization up for faster learning loops to capitalize on the benefits.
Ready to get started with generative AI? Concentrix can help you envision the use cases, make decisions about the various technology options, and build the return-on-investment model for your generative AI initiatives.