Deltec Bank, Bahamas – Big data and artificial intelligence are reshaping how institutions and consumers perceive the banking industry
Big data and artificial intelligence have been the focus of discussions during the annual meeting of the World Economic Forum for the past several years. A robust amount of sensationalism follows these trends in the financial sector, so it is essential to separate the myths from reality.
Banks, credit unions, and other financial institutions worldwide are making large-scale investments in artificial intelligence to leverage the potential benefits that big data could provide. At the same time, regulators and government officials are trying to manage the significant problems and growing trepidation that comes with automation being a central component of society’s institutions and markets.
According to Deltec Bank, Bahamas, “Big data and artificial intelligence are reshaping how institutions and consumers perceive the banking industry.”
Five critical changes are necessary for the ongoing survival of individual firms.
Change #1: Competitive Product Creation
Online access to information for consumers leads to a process where a bank’s products and services are easily compared and commoditized. That means it is not sufficient anymore to compete in the industry by offering credit quickly and at a reasonable rate. Those historical levers are gone.
Banks must now use big data and artificial intelligence to predict demand, customize products for individual consumers, and create flexibility within the marketplace. The debate about using AI should not be about the automation capabilities that could replace humans one day in the financial sector. The conversation should be about how it can add more ways to provide service and create the next level of the workforce.
Change #2: AI-Based Customization
Scalability with big data and artificial intelligence isn’t a measurement of size. It involves how much customization an institution can provide immediately when consumers approach banks, credit unions, and other financial providers. The firms that experience the most success with this change will be those that still offer low-cost solutions while using differentiated products and services to stand above the competition.
Some banks might try to be everything to everyone with this change, but that approach is not a recipe that will likely lead to success. The institutions that become niche, specialized providers, will have more positive outcomes.
Change #3: Adaptability will be Fuel
Big data and artificial intelligence are technologies that are approaching a stage of maturity. Although using them can be expensive, especially without any current internal expertise, a need for adaptability is also necessary when incorporating these options into the industry. That’s why the larger institutions are using their resources to invest in these technologies; it will help them to become as agile as their smaller competitors.
That means the future of the banking industry will be defined by the large-scale institutions that develop an adaptable mindset. Without that flexibility, there won’t be any resources available to meet the more customized demands of consumers.
Change #4: Open Banking Usefulness
Platforms and aggregators will sit on financial account data feeds with artificial intelligence powering their infrastructure. It will be a place where customers can use all of the data from the institutions they use in the banking industry to create individualized usefulness. The competitive nature of the banking industry will make it so that the firms with the capability of analyzing the most data on behalf of the consumer will see the most opportunities to generate profits. It is a model that’s built to be efficient and fast, with AI and big data providing the foundation for progress.
Change #5: Self-Service Opportunities
When Banks installed ATM’s machine, they saw a significant reduction in wait times and labor costs at their physical locations. Banks and credit unions can now use artificial intelligence to let consumers have a much higher level of experience. Customers can receive advice on their daily financial activities because big data and AI can spot patterns in the information that human-based service providers cannot see.
Big data and artificial intelligence benefits cannot be ignored. The institutions that embrace these changes are the ones that have the brightest future in the global marketplace in years to come.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.
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Company Name: Deltec International Group
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Phone: 242 302 4100
Country: Bahamas
Website: https://www.deltecbank.com/
