‘Self-driving’ banking: using technology to connect with customers
Money is often cited as being one of the biggest causes of stress in people’s lives. So imagine a ‘Self-driving’ bank account that took away some of that stress by watching your finances 24/7 and acting on your behalf to make your money work harder for you. Well it’s a future that's very close to becoming a reality with latest advances in Artificial Intelligence now able to do more for you than ever before.
In fact, from analysing anticipated expenses to automatically transferring money to keep you out of debt, modern banking systems are increasingly able to offer personalised services that work specifically for each customer.
In fact when it comes to the 'self-driving' concept, banks have found the perfect partner in artificial intelligence to support their efforts to provide each customer with online, customized, and increasingly automated care. The concept of ‘self-driving’ banking initially refers to banks being able to automate specific processes for their customers in such a way that customer bank accounts will “drive themselves” (like cars) and will eventually be able to make decisions on behalf of customers – always with their consent and underpinned by the data the bank has about their financial habits.
For example, a 'self-driving' bank account could transfer a specific amount of money from a checking account to a savings account if it detects that the customer has deposited more than usual. Or it could detect that the customer has overdrawn on their account and immediately transfer funds from a secondary account in order to clear the overdraft. A preview of these kinds of services can already be seen in solutions like Bconomy, which anticipates customer needs, alters them in the case of specific scenarios (like an overdraft), and proposes activity to improve the customer’s finances.
Above and beyond
But that is just the beginning. "The bank will be able to predict customer behavior — from a series of criteria or patterns — and will be able to make decisions on their behalf. This will include things like knowing when the customer wants to travel abroad to visit family each year and being alert for the best time to reserve tickets, in addition to exchanging currency at the best price,” explains Derek White, Global Head of Customer Solutions at BBVA.
This vision of the future might materialize thanks to the transition towards open banking, which will allow banks to merge financial data with data on third party platforms, providing them with a more holistic view of the needs of their customers in all aspects their lives. By complementing its data with data from third parties, the bank will be able to give customers the choice to automate other day-to-day decisions like which hotel to book given a certain budget or how to save money on their phone bill.
"These changes, which impact the mechanics of people’s decision-making processes, are the most fascinating. It is also in this area where banks have the most potential to really add value for our customers,” White points out.
Furthermore, the day is not far off when every customer has their own personal financial advisor, available at any time, on any device, via text (on telephones, tablets, etc.) or voice (Siri, Alexa, etc.). Beyond managing routine tasks – like keeping tabs on the account balance, credit rating, or when to pay off debts – these technological advances will facilitate the active management of customer finances as well as other areas of their lives. They will support monthly budgeting – from grocery shopping to insurance – and pay the bills as efficiently as possible.
Charlie and Simple
These kinds of automated services are already available to customers, and the extent to how they can be used is improving at a quick pace. The Safe-to-Spend functionality from Simple, a digital banking platform in the U.S. owned by BBVA provides a real-world example of this vision. It uses customer data to help define savings goals. The app plays the role of the “virtual accountant” who allocates funds in order to comply with the goals set by each user.
Another example is Charlie, an intelligent chatbot who provides financial advice to people in the U.S. who are unfamiliar with the world of finance.
Are you getting the best deals out there? Charlie makes sure you do.
This friendly penguin, powered by artificial intelligence, is dedicated to helping customers in the U.S. identify new ways to save. The service helps customers avoid financial instruments with elevated associated costs, helping them have peace of mind at the end of the month. To accomplish this, it controls their expenses and helps them achieve their financial targets “so they can focus on other, more important aspects of their lives,” says Charlie’s CEO and co-founder Ilian Georgiev.
The importance of data
An essential prerequisite to attain this level of automation in products and services lies in the responsible and transparent safekeeping of customer data – and always with the customer’s consent. The way organizations gather and understand customer data has changed dramatically with the arrival of big data, artificial intelligence, blockchain, and cloud computing technologies. These exponentially revolutionary technologies are key to providing more effective, customized solutions. Yes, the large volume of data has to be filtered and analyzed: value-add solutions can only be developed and deployed by understanding these data.
As a consequence, this new way of automation introduces a shift in the role of banks. "This change requires us to be more than than mere suppliers of a product; it entails embracing the advisory and information services, which we are placed to provide, in order to meet and exceed our customers’ expectations," Derek White maintains.