Bots set to change the rules of BFSI; will put substantial capabilities in the hands of consumers

Bots, powered by ample compute cycles and memory as well as the rapid advances in AI, will put substantial capabilities in the hand of the consumer.

Bots and AI are transforming virtually every industry vertical. But the heaviest impact may well be on the financial services industry. The BFSI industry is ripe for disruption – because it is too important and too inefficient for the status quo to survive. Modern financial industry involves a massive information asymmetry between financial organizations and the consumer – bots will now level the playing field. Bots, powered by ample compute cycles and memory as well as the rapid advances in AI, will put substantial capabilities in the hand of the consumer.

Representational image. Reuters

Representational image. Reuters

Bots will make the user experience simple and easy

Calling a bank or broker means significant hold time, complex authentication process and inconsistent service. Bots will enable instant responses, automatic authentication and consistently outstanding service. Doing financial transactions will become as simple as “recharge my mom’s phone”, or “send 100 to my friend”. It’s as if every consumer now has a private relationship manager who can magically take care of things.

Bots will be pro-active, not reactive

Modern finances involve a dizzying array of choices and due dates. Banks and brokers tell you the penalty you incurred because you forgot to pay your bills on time or renew your policy. Bots will be pro-active. They will remind you of timelines and deadlines. If you can’t meet the deadline, they will pro-actively make alternative arrangements. Either way, bots will take away a huge burden off the consumer’s shoulders.

Bots will enable strong personalization

Banks and brokers deal with faceless, nameless customer IDs. Your bot will get to know you over time. If you prefer constant reminders, you get them. If you prefer not to be disturbed, it won’t bother you. Bots will notice behavior patterns and automate them for you e.g. “recharge mom’s phone every week”. Bots will find you relevant offers and shield you from the irrelevant spam.

BSFI. Gupshup

BSFI. Gupshup

Bots will make it easier to keep track of finances

The more financial instruments get created, the harder it is for consumers to keep track. Bots will make it easy for consumers to stay on top of their financial history and status. Bots can provide daily / weekly summaries or respond to on-demand queries. Bots will automatically create summaries at tax time. Bots don’t forget things.

Bots will optimize earnings and savings

Are you moving funds around to maximize the interest rate? Are you minimizing fees and penalties? Does your bank or broker even inform you – or are they conflicted by the fact that they benefit from those fees? Your trusty bot will analyze every aspect of your finances to maximize earnings and minimize costs. Your bots will optimize your choices for you.

Bots will earn and spend money for you

Continuously maximizing financial outcomes requires keeping tracking of millions of constantly-changing financial data points to, say, rebalance your portfolio, increase or decrease credit exposure or finding a great deal on that expensive purchase. It’s like drinking from a fire-hose. However, your bots have the ability to keep track of all that information. At some point, you may be comfortable enough to delegate enough authority to them so they can autonomously make certain financial decisions for you. Wouldn’t it be nice if your bot could automatically earn money for you?

Bots will literally change the face of financial firms

The face of the financial industry, the consumer touch-point, is retail outlet, call center, paper bill and email alert. Tomorrow, the touch-point will be a bot that can text or talk with you like a human, with extensive personalization. Over time, the consumer will care more about the “software” than the “hardware” i.e. they will care more about the bot than about where the money actually lies. So, if the bot decides to move money from one broker to the other, the customer may well be indifferent to it.

Thus, bots are poised to empower consumers with substantial financial IQ to make better financial decisions. This will have massive ramifications for the BFSI industry. Banks and brokers will no longer be able to rely on good margins derived from overwhelmed and distracted customers making sub-optimal decisions. Consumers are about to become rational and smarter and the market is about to become much more efficient. BFSI firms will need to provide more innovation, better pricing, better services and more information. Banks, brokers and insurance providers will need to better understand the new dynamics of bots and AI and start reinventing their role.

A bot-and-AI powered meteor is about to strike the BFSI industry – some firms will adapt, many others will perish. It will be a survival of the fittest. It’s time for financial firms to start adapting.

The author, Beerud Seth is the Founder & CEO, Gupshup.

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