Parth Desai, CEO and Founder of Pelican, discusses why AI is already a fact and not fantasy.He highlights why financial institutions and corporates need to get on board now – or risk getting left behind.
A great many businesses have been hesitant in exploring artificial intelligence (AI) in their operations, believing it to be still in its infancy, and unsure of its risk and rewards.
They are wrong. AI is here, and it is already being used in many varied sectors.
The payments and compliance teams for both banks and corporates are guilty of this thinking, and it is greatly affecting their performance – as customers demand more, teams are unable to keep up.
My long experience has shown me that the rewards and benefits AI brings far outweigh any perceived risks, and it is essential that investment is made into the technology urgently – lest you be left behind.
Using AI in practical and real business solutions is a journey. The earlier you start, earlier you will reach your destination and goal.
Choosing the right path
The insights we gained from a recent survey clearly highlights that there is a dire need for a new approach and attitude towards the role technology plays in banking. This is especially true when it comes to payments and compliance functions.
It is almost beyond belief that in 2016 – and despite all the past investment in technology – the financial services sector is such a laggard when it comes to AI.
Virtually every firm that responded to our survey cited high levels of inefficiencies, alongside a continued reliance on human intervention, to be the major blockers in payment and compliance.
This has significant impacts on the business as a whole, leading to spiralling costs and an increasingly dissatisfied customer base. Indeed, many customers are voting with their feet and moving towards a new breed of payment providers and fintech challengers that offer faster, more efficient payment solutions.
The only answer thus far has been to throw more people at the problem. This solution is far from sustainable, especially as these tasks are monotonously data intensive.
It is no wonder that many banks are edging ever closer to the abyss.
So how can the sector improve customer service? By following suit with other sectors and adopting AI.
Analysts believe that by 2020, at least five percent of all economic transactions will be handled by autonomous software. Gartner, in particular, takes the view that AI will be pervasive in many products in the same space of time.
By combining machine learning with natural language processing and the knowledge from current staff on their area of expertise, we can create an intelligent machine that will dramatically reduce the need for unnecessary human intervention. The computer will be able to handle most issues, including rejection or deviations in payments, as it will learn from patterns and behaviours.
This enables Intelligent Payment Management (IPM)– the full automation of the entire process, using AI, and is something every team should be striving for. The benefits are clear, and this is something available right now.
Yet the pickup amongst both banks and corporates has been slow, and is only just starting to increase. This can be partly due to the cost, and depending on whether the department has the expertise to apply this. More often than not, they have neither the financial capability nor the expertise.
One answer to this is to partner with a fintech firm that already has these capabilities and can apply them into the business. This way, you get the best of both worlds – the expertise and a cost-effective manner of implementation without having to compromise on the end solution.
AI really does provide the only solution for both banks and corporates to be able to back away from the abyss when it comes to their payments and compliance functions.
If you’re not exploring this option by now, maybe it’s time to ask yourself: why?