Transforming customer engagementusing Artificial Intelligence

Artur Agostinho

The Financial Services Landscape is Transforming

HOTEL COMPANY THAT

DOESN’T OWN ROOMS

BANK THAT DOESN’T

OWN BRANCHES

INVESTING WITHOUT

ADVISORS

Global financial institutions perceive threat of disruption from

several angles

DIGITAL IS DISRUPTINGEVERY INDUSTRY

TECH

COMPANIES

STARTUPS

TELCOS

RETAILERS

BANKINGLOANS AND CREDIT

INSURANCE

INVESTING AND

RETIREMENT

WEALTH

MANAGEMENT

Source: EFMA-Infosys Feb 2015 Digital Banking Report

BLOCKCHAIN

TAXI COMPANY THAT

DOESN’T OWN CARS

“ N OW P L AY I N G I N T H E B A N K I N G I N D U ST RY I S A N E V E R - E X PA N D I N G H O S T O f D I G I TA L N AT I V E S , I N C LU D I N G G O O G L E , A P P L E , FAC E B O O K , A MA Z O N , A L I B A B A , A N D OT H E R L A R G E P L AT F O R MS L I K E U B E R A N D A I R B N B ”

GAFA are disrupting banking services…

Massive volume of Data, Advanced in AI, Power of Cloud

DATA & AIOPEN BANKING

& PSD2

CUSTOMER

ENGAGEMENT

The Digital Transformation pillars in Financial Services

Intelligent BankPredicting what’s next for the customer

seamlessly

Immersive BankProviding frictionless consistent customer

experiences

Traditional BankBank provides multiple channels for

trusted interactions with clients

Intelligent automation

API economy

Natural interaction BOTs

Predictive decisions

Personal finance manager Robo-advisory

CRM

Social

Cloud

eCommerceAnalytics

New branches and ATMs

Real-time marketingMobility

Payments

Deposits

CreditsLoans

The ultimate goal is

the provision of a

single experience

for customers

through one

interface – one

seamless end-to-

end journey to the

desired customer

outcome.

5

“Open” – The scary new word in Financial Services

Technology

• Allow software

components to

communicate and

exchange information.

• Specifies the connection

mechanism, data and

functionality that are

made available

Operations

• Enhance the opportunity

for new partnership

approaches with third

parties

• Increase operational

efficency by simplifying

internal IT systems and

processes

Business

• Explore new business

models and integrate

new players, startups and

other industries

• Create an opportunity for

each player to build a

better offers, and

consumers make better

choices

The new banks are ecosystems

BBVA – API Market Credit Agricole – CA Store Deutsche Bank – API Program

… the “Digital Leaders” are following the same path

1. COMPLIANCE ONLY

PSD2 Open Banking

Trad

ition

alSi

mila

r to

GAF

A

3. SELLINSIGHTS

2. “PRODUTIZE” ACCESS

4. VALUEAGGREGATOR

PRODUCT & SERVICES OFFER

VALU

E C

HAI

NP

ARTI

CIP

ATIO

NLE

VEL

BECOME AN “UTILITY”

UP TO - 30% REVENUE

BECOMEAN“EVERYDAY BANK”

+20% REVENUE

3. SELL INSIGHTS

Monetize access to data, insights and

advisory services

Set up as AISP and / or PISP and

increase the financial offer

1. COMPLIANCE ONLY

Comply with mandatory requirements

Allow mandatory access to 3rd party

Provide the basic service APIs

2. “PRODUCTIZE” ACCESSDevelop a robust API platform

Allow granular access to data and monetize

that access;

4. VALUE AGGREGATOR

Create an ecosystem

Create a financial and non-financial

offer

Use new channels, integrated

technologies and advanced analytics

The choice banks need to do ina future of Banking as a Service…

In our view, the winners…will be those

financial institutions that realize the value of

their data and capitalize on it by employing

advanced analytics.*

*Source: Cognizant, “How Analytics Can Transform the U.S. Retail Banking Sector” 2011. ** TDWI , Halper, Fern, “Operationalizing and Embedding Analytics for Action” 2016

Forward-looking organizations are beginning

to realize that it is not enough to analyze their

data; they must also take action on it. To do

this, more businesses are beginning to

systematically operationalize their analytics as

part of a business process.**

Technology is Making Change PossibleThe Analytics Road is Taking Shape

CognizantTDWI

Focus on forecasting future events and behaviors

• Predictive Analytics

• Data mining

• Big data analytics

• Location intelligence

The Data Challenge in Banking

YEARS of DATA

COLLECTION

Mounds of data has

been collected over the

years and stored on

tapes / discs in vaults -

inaccessible

STATIC

INFORMATION

Today’s analysis is

based on a data extract,

a “snap shot” in time;

analysis must be

redone, reconfigured,

and/or restructured

when data updates

NON STANDARD ETL

Different formats for

the data are used

across the lines of

business; same data

elements named

differently

SILOED

INFORMATION

Data resides across all

the different lines of

business and most, if

not all, is unconnected

CUSTOM ANALYTICS

Differing models and

analysis tools are

typically used by each

LOB, and data is

accessed at different

times leading to

different versions of

the truth

TECHNOLOGY

MANAGED

Business units need to

make requests for data

from IT/Ops for their

analytics needs leading

to delays in time to

value

Data Challenges

The Implications

Business Vision

Impairment

Vulnerable to

Competition

Lack of Customer

Insight

Inability to Timely

Response

Lack of Agility

and Growth

Unreliable

informationCompliance and

Regulatory Risk

Unnecessary Cost

and Waste

Baseline Analytics

Advanced Analytics

Predictive Analytics

Operational Reporting Sales and Marketing Performance Customer ValueShare of Wallet

Next Best ProductPropensity ModelsCustomer key momentsPerspective of future value

Data patterns that may predict future events we can act on Churn anticipation Future event predictionAnticipation of customer decision process

Data is the new asset class…Regulations are imposing data governance and data protection mechanisms…

… Digital Transformation will be supported on the evolution of the analytical model for

predictive system that generates value in the bank relationship with customers

How AI is transforming

the future of Fintech

Faster decision-making and deeper

learning (recognize predictors of financial

turbulence)

More intelligent about peoples spending

habits, health, lifestyles

Predict what people needs will be for

different scenarios of spending and

saving

Trust biggest challenge for Fintech

Smarter computers, algorithms, big data and dedicated AI systems

79% of banking, insurance, and fintech CEOs believe customer

expectations are shaped by hyper-relevant, real-time, and

dynamic experiences encountered across any industryAccenture – Banking as a Living Business

Third-party

APIs

INTELLIGENT

EDGE

Blockchain

Automated

workflows

Mixedreality

Bots

IoT devices

Naturalvoice

Mobile apps

ATM/kiosks

INTELLIGENT

CLOUD

Risk

management

Security

Customer Bank

Real time Real time

The most comprehensive set of technologies

Digital Connected Bank

Digital Transformation & AI – Smarter Banks

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