Exploring Innovation in the AI Era: Insights from the Retail Banking Transformation Americas Conference
At the recent Retail Banking Transformation Americas conference in Charlotte, North Carolina, I had the pleasure of co-facilitating a roundtable discussion with Ron van Wezel, strategic advisor at Datos Insights. The session, “Navigating Innovation in the Age of AI: The Intersection of Technology, Customer Experience, and Operational Excellence in Lending and Deposits,” brought together industry leaders to explore the future of retail banking. From solving pain points within the lending landscape to exploring how technology and AI can be leveraged, attendees uncovered key insights into the current state of lending and where it is headed.
Here are some key takeaways from the lively conversation:
Key changes in consumer and small business behavior
We began by examining the significant shifts in consumer and small business behavior that are driving the need for improved lending products. The consensus was clear: customers now expect a seamless and efficient credit application process. This applies to the in-branch experience, which is still alive and well among younger generations. Datos research reinforced this, revealing a strong preference for digital channels that streamline applications, accelerate credit decisions, and expedite disbursement of funds. This shift underscores the imperative for financial institutions to meet these changing expectations with innovative solutions.
Solving Problems and Inefficiencies
Our discussion then delved deep into the pain points and inefficiencies that plague the current lending environment. Financial institutions are bracing for a surge in credit applications as interest rates eventually fall, but the timing remains uncertain. Training employees on new automated processes is essential to scaling effectively, but it remains a challenge. Liquidity issues have led some credit unions to outsource their mortgage portfolios, unintentionally creating new inefficiencies.
Manual back-office processes remain a bottleneck, preventing you from delivering the streamlined experiences your customers demand. In addition, income and identity verification processes essential to preventing fraud create friction in the onboarding journey. The ability to innovate and grow your portfolio is hampered by the need to effectively manage ongoing operations.
Leveraging technology for improved customer experiences
One of the most interesting parts of the discussion was exploring how lenders are leveraging technology to deliver personalized and seamless customer experiences. Attendees highlighted the importance of user-centered design, omnichannel integration, data analytics for cross-selling, and robust digital self-service options. However, interacting with customers who are primarily using their loan products remains difficult, primarily because the scope of these relationships is limited (e.g., automatic payments are rare).
To overcome this, it is important to analyze your end-to-end digital self-service process to identify and mitigate friction points that lead to customer churn, and leverage cross-selling at appropriate process points—not just adding the endgame via out-of-band email communications. We also discussed the power of personalized service, such as offering support in multiple languages, which can significantly improve engagement and retention.
The Role of AI in Lending and Deposit Technology
The transformational potential of AI in lending and deposit technology has been a major focus. Financial institutions are already leveraging AI to make smart credit decisions, assess risks, and manage compliance. Combining rule-based systems with machine learning models has shown promising results in optimizing customer experiences.
Innovations such as biometrics and AI-based processes are being explored to further streamline operations and enhance security. Of particular interest is the mapping of application drop-off data to call center interactions, which can provide valuable insights to improve and optimize customer retention strategies.
Ensuring compliance
Although briefly mentioned due to time constraints, ensuring regulatory compliance in a rapidly evolving technology environment is still critical. There are few major initiatives across the industry, but collaboration between regulators and industry stakeholders is essential. The most important challenge is sharing data while maintaining consumer confidentiality, a balance essential to fostering trust and innovation.
conclusion
A roundtable discussion at the Retail Banking Transformation Americas conference highlighted the critical role of AI and specialized SaaS platforms in transforming lending and deposit processes. By understanding and addressing changes in consumer behavior, optimizing operational efficiencies, and leveraging advanced technologies, financial institutions can better meet customer expectations and drive innovation. However, maintaining regulatory compliance and fostering collaboration are essential to sustainable growth in the AI era.
I look forward to continuing these important discussions and watching how our industry evolves to meet these exciting challenges.
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