Traditional banks’ use of artificial intelligence and data analytics is growing slowly, but the tools exist to accelerate that pace, Personetics’ vice president of marketing Eran Livneh said. A leading provider of AI-powered applications for the financial services sector, Personetics has provided help to more than 45 million banking customers around the globe through personalized insights generated by their Cognitive Banking Brain. Personetics works with four of the top five American banks and half of the top European ones.
They also work with smaller institutions.
“We’re seeing a huge spike in demand and interest in what we’re doing,” Mr. Livneh began. “The kind of work we’re doing with banks is growing in all directions. What we’re seeing is midsize banks, small banks and credit unions are all interested in what we’re doing.”
No matter their size, the marketplace has evolved to the point financial institutions have to view the ability to deliver technology-led, personalized advice as a must-have, not a nice-to-have, he added.
There are differences on how a smaller institution approaches technological growth as opposed to a large one, and some reasons you can probably guess, but others are more surprising. Smaller institutions tend to be more streamlined and can more easily absorb new technology without having to contend with multiple legacy systems and patches. But Mr. Livneh explained it is not necessarily the size of the bank that dictates how easy or difficult it is to integrate change, but how closely integrated their different sectors are together. There may be several such sectors, but if they are all in on the planning and adoption, it can help accelerate the process.
Personetics is seeing a new class of banks where such integrations are much easier. United Kingdom-based challenger banks and American digital banks are two types Mr. Livneh cited. The have new systems built on modern architecture or are geared to integrate with partners. In such cases it may only take three or four months to fully integrate the technology, a number that has dropped as more banks become used to open systems and companies like Personetics that can help them with the task. The growth in banks’ open APIs is another key factor, he added.
Mr. Livneh said Personetics is perfectly positioned to help institutions make the leap to an AI-powered system. AI itself isn’t very new, but with a demonstrated capability in making it more usable, Personetics can explain the use cases and benefits.
Those benefits include more computing power which can better make sense of the growing amount of data at a company’s disposal. Old personal financial management systems were labor intensive for the individual, as they had to set up systems and enter in data. The entire process was disconnected from what people were doing in their daily lives and did not provide enough actionable steps.
The new technology is much more responsive, and it is attracting companies who had dropped the older, clunkier versions, Mr. Livneh said.
“We’re seeing a new generation of proactive money management. The customer can go into the banking app and day-to-day they are offered more useful information. They can see it and act on it right there and then.”
The key to this growth has been designers’ abilities to take something complex and break it down into digestible pieces of information which are easier for the individual to act on, Mr. Livneh said. For example, as soon as your paycheck hits the account you may get a recommendation to move some of it to savings, based on your individual cash flow projections.
How society views, protects and uses data is coming into greater focus thanks to European initiatives such as MiFID II, GDPR and the Facebook/Cambridge Analytica scandal. Mr. Livneh said customers tend to trust their financial institutions more than other companies and organizations they deal with but the challenge comes in getting different organizations to share information to a single customer’s benefit. Linking between banks or from a bank to a stock trading account. While such information is not required in order to begin to deliver value, it can help to provide more of it.
“Once they see the data is used to provide value and not to sell, then customers become more receptive to them sharing data,” Mr. Livneh said.
