Monday, June 17, 2024

The future of AI-powered financial services

Building trust through personalization and ease of use.

By Rishan Lye, Partner and Consulting Leader at BDO Canada

This week, I met with business leaders from three out of the top five banks in Canada. They were great meetings, across multiple bank service lines, and focused on brainstorming and problem-solving. Can you guess the topic of discussion? Yes, it was AI in every discussion, specifically, the adoption strategy of Generative AI (GenAI) for their groups. I check this off as a normal week ever since the GenAI floodgates burst open last year. 

The financial services sector is ever evolving, and now, we see artificial intelligence (AI) acting as a catalyst to this evolution. The surge in data creation is pushing banks to adopt AI to manage and extract insights from massive amounts of information. Financial institutions need AI not just for data processing, but also to offer meaningful, customized solutions to their clients.

From wealth management to credit assessments and financial planning, AI is redefining how institutions engage with their customers. This article dives into this shift, sharing observations our team has had working with many of the largest banks in Canada. We will explore the potential for improved user experiences and tailored financial services that can build even greater trust with clients.

Status check: Where are we now?

As we witness one of the largest inter-generational transfers of wealth in history, there has never been a more urgent need for innovative financial solutions. Financial institutions and their clients need advanced tools and strategies to effectively manage and invest these substantial funds, and with consumer debt reaching unprecedented levels, there is a critical need for tailored approaches to debt management and financial planning. Accessible and increasingly influential, AI can reshape not only the financial services operational end but also match consumer expectations, driving demand for personalized and AI-driven financial solutions.

Currently, AI in the financial services industry is in its early stages, marked by experimentation and proof of concept. The financial institutions we are working with are focusing on building the necessary infrastructure to support AI at scale, particularly in enhancing call centers due to the immediate ROI and impact. This transformation promises to deliver highly personalized services that cater to individual customer needs and goals. Across all of the industries we work with, we have seen financial services making the biggest investments in building an AI-enabled future.

Future outlook: What should we expect?

In the immediate future, we shall witness AI further supporting customer service representatives by providing personalized responses derived from thorough data analysis, thereby greatly improving the quality of customer interactions. Our financial services customers are evaluating their private data to determine how to improve in-house built large language models. 

Looking ahead to the medium term, AI is poised to take on a more autonomous role in customer interactions, seamlessly mimicking human-like conversations through sophisticated voice and tone modulation technologies.

Custom AI solution

BDO Digital, BDO Canada’s technology arm, has been focused on guiding our financial services customers on their digital transformation journey. Recently, an AI-powered solution built in collaboration with financial services customers has been announced, aiming to further strengthen the sector and empower everyday Canadians. It is set to provide personalized financial recommendations, assisting in credit worthiness assessments, financial budgeting and planning, as well as wealth management.

BDO’s AI solution is tailored to fit the specific needs of each financial institution. It’s primarily designed to support and augment the existing workforce, focusing on immediate impact while laying the groundwork for future advancements.

The next phase of BDO Digital’s AI development involves training models to handle specific subsets of data and fine-tuning them for particular customer cases to enhance precision and relevance. This shall go alongside the research and development effort focusing on agentic AI or autonomous AIwhich aims to autonomously manage significant portions of organizational workloads while remaining under human supervision for ongoing improvement and oversight.

To learn more about BDO Digital’s AI solution, visit the press release for further details. 

Ethical and responsible AI 

As financial institutions incorporate AI into their services, prioritizing trust with customers is paramount, and to build trust, ensuring key responsible AI principles must be in place; transparency, accountability, fairness, reliability and safety, privacy and security, as well as inclusiveness. 

Based on current engagements we are executing in this sectorspecifically, concerns regarding data privacy, responsible AI, and ethical practices are at the forefront of discussions. It is imperative to promptly examine the implementation of key principles and governance that align with AI development. This involves adhering to ethical guidelines, prioritizing privacy and security, and ensuring that AI applications are both beneficial and compliant with all applicable regulations.

This could be done through strategic collaboration with majortechnology partners to ensure that AI solutions are developed responsibly and comply with regulatory and privacy standards.

Additionally, financial institutions should transparently communicate how AI manages customer data and informs decisions, addressing privacy and security concerns. Clear explanations of AI benefits and safeguards can further fortifytrust with clients. They must also understand how their suppliers handle data and implement ethical AI so that suppliers also adhere to strict standards of ethics and responsibility around AI.

The path forward

As AI continues to advance, the possibilities for innovation in financial services are virtually limitless, promising a future where managing finances is more intuitive, personalized, and aligned with each customer’s unique goals.

BDO Digital is committed to staying ahead of the curve in an industry that increasingly embraces disruptive technologies, helping financial institutions accelerate and optimize their AI initiatives. Serving over 10,000 clients within the financial services sector, BDO Digital continues to offer valuable insights and guidance to help financial services institutions navigate the ever-evolving AI space.

If your organization is on an AI, specifically GenAI, journey, be sure to explore BDO’s roadmap for successful GenAI adoption, tailored to ensure seamless integration aligned with your business objectives.


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