Fintech companies don’t exactly offer new services most of the time. On the contrary, they offer an alternative to traditional financial services.
This may cause someone to wonder why fintech in general has been so successful. After all, if these services already exist in some capacity, what makes the alternatives so appealing to consumers?
There are many answers to that question. In general, however, fintech startups leverage technology to provide customers with a better experience than that offered by traditional financial institutions. By using the latest technological innovations, new startups can offer greater convenience, efficiency, and affordability.
Artificial intelligence is one example of a type of technology that plays a key role in many fintech products. The following points illustrate just some of the ways in which emerging companies are using technology to improve upon the customer experience:
AI is valuable for numerous reasons. One is the simple fact that AI can essentially analyze data 24 hours a day, seven days a week.
This is very useful in developing products for customers. By analyzing customer behavior and other relevant data, AI can help fintech startups to create products and services that meet consumers’ needs.
This makes it easier to quickly provide customers with the products or services they’re seeking. An example would be a fintech-based lender using AI to efficiently determine the best loan option for each given customer.
Boosting the efficiency of such processes doesn’t simply make fintech options more convenient than their traditional counterparts. It also reduces costs. The less time spent on a given financial task, the less a company has to charge its customers.
It’s also worth noting that AI allows for a greater degree of personalized service than ever before. This is key to make the right impression on users. While an established bank may offer all customers the same standard products and services, a fintech company using AI can learn about each customer’s unique behaviors and needs, then provide them with a truly personalized experience.
Some financial services have historically focused on high-net-worth customers. Personal financial planning is one of them. Although just about anyone could benefit from meeting with a financial planner to ensure that they’re saving and investing their money properly, many simply can’t afford to do so.
AI is changing that. Again, AI is capable of constantly analyzing various types of data. This is essentially a major component of the financial planning process. Experts analyze trends to determine which investments are right for their clients.
When that process is automated with AI, it becomes much less expensive. That means people who can’t afford to hire a human financial planner can still take advantage of an AI-based planner. The impact that this may have on the financial health of entire demographic groups could be substantial in the future.
Improving Customer Service
Anyone who has ever opened a bank account knows there are times when it’s necessary to contact a financial institution with questions or concerns. Typically, this involves calling the company, waiting for a representative to be available, and hoping that they can assist you.
Once again, fintech companies are using AI to make this a more convenient experience. While there are still going to be issues that a human representative must address, AI customer service representatives can often handle a wide range of tasks and questions. Because they’re always available, customers don’t have to worry about setting aside a lot of time for a phone call. This is the type of seemingly minor detail that can result in strong customer loyalty.
Facilitating a Human Approach
Many positions in the financial services industry involve handling a wide range of responsibilities. That makes it difficult for employees at various levels to focus solely on providing value to their customers.
This is yet another issue that AI can address. For instance, by using AI to undertake contract analysis, JP Morgan was able to free up 360,000 annual hours from its employees’ workload. Those employees can now spend more of their time on tasks that involve actually working directly with clients.
This represents a very general (but significant) way in which AI and fintech stand to improve the customer experience. Fears that AI and automation will result in less of a need for human employees are unfounded. Instead, AI will allow human employees to offload certain tasks to a computer. As a result, they’ll have more opportunities to make users a priority.
It’s also important to understand that the few examples here don’t begin to represent the full potential of AI in fintech. That’s because the technology itself is constantly improving. As AI becomes more powerful, it’s highly likely that fintech companies will identify even more ways to use it to their customers’ benefit.