Revolutionizing Customer Experience in FinTech: The Generative AI Impact

By: Niraj Singh | RIEPL

As per Gartner Over 69% of IT Leaders have prioritized Generative AI for their business use cases.

McKinsey Report states that Generative AI solution can save approximately 2 to 4T $ per year by increasing productivity across 67 use cases.

NBER paper shows that productivity of customer service worker increases by 13% if they are enabled with an AI driven tools and with customer 360 data. This improves First call resolution rate and hence has direct impact on customer experience.

86% of companies report a major uptick in their business due to hyper-personalization

Over 72% of US retailers believe that Generative AI powered hyper personalization will be a gamechanger for their business. Can this transition to other sectors as well?

Over 52% of consumers said that they would be interested in Generative AI managing their finances.

As per google cloud benchmarking study Consumers of Financial services marked following as key use case for Generative AI: Virtual assistant 80%, Capital market research 76%, Regulatory Code Consultant 66%, Personalized Financial Recommendation 76%.

Thus, we see that Generative AI has a potential to disrupt the industry in similar way the computers, internet and cloud did in previous decades. Companies understand that non adoption of Generative AI based solution may prove to be an existential threat. Fintech industries are not far behind, and they are rapidly leveraging the Generative AI solutions for use cases like hyper-personalization, risk management, compliance, financial advice, cash flow management, tax advise etc. In this article we will study some key fintech use cases and some examples of their adoption. So, lets begin.

Key Use Cases

Market Trend Prediction for Investment Portfolio
Generative AI can churn Marketing data and summarize the results as key emerging market trends. Hence it can guide portfolio managers with strategic asset allocation and alert them when a trend change happens.

Automated Investments Advice
This one is for investors. Looking at investor’s financial goals, risk appetite, current portfolio, Generative AI can give targeted advice on investments, stock rotation etc.

Online Trading Advice
Generative AI can look at technical indicators and give real time trading advice and alert the traders whenever there is a trend reversal.

Intelligent Creditworthiness Assessment for Lending
Generative AI has access to online and offline data about customer credit data and spending habits and even social data. Using this data Generative AI can provide the lenders, a more comprehensive and wholesome Creditworthiness report of a customer.

Fraud Detection in Real Time Transactions and Payments
Generative AI can have access to data about customer transactions and their behavior on internet. Thus, they can create a risk score for each transaction for each customer in real time. With a proper alerting mechanism, it can prevent fraud at scale.

Compliance Process Automation and Monitoring
Generative AI has access to all the compliances and rules and can thus become a part of approval process in a compliance chain and do a real time review of a process. It can alert in case a compliance is breached. Generative AI powered bot can also vigilantly track change in compliance and policy and react to them instantly, making it an effective compliance checker.

Personal Finance Report and Cash flow Management
An AI bot with access to a person spending data and accounts data can quickly summarize a financial report, spending report and advise them on how to optimize spending.

Personalized Insurance Products
A Generative AI model with customer medical records, family data, family history data, financial condition can advise them on best Insurance product available in the market.

AI Assisted Customer Service Chatbots
AI assisted intelligent bots having access to customer 360 data can provide a fast, round the clock responses to a customer query. These queries are free of human errors and can deepen the customer trust and satisfaction with the service.

Real Time Examples on Generative AI Application in Fintech

Intuit
Intuit has deployed a LLM powered Financial Assistant across all its products, i.e. QuickBooks, TurboTax and Credit Karma, called Intuit Assist. Customers can ask questions to Intuit Assist and it helps in understanding and optimizing taxes, business analytics, financial advice etc. Intuit Assist is powered by 60 Petabyte of data, 20 billion Transaction and 100 million customers. As per Intuit the Beta Testing phase with 10000 customers has been extremely happy and Intuit is very optimistic about their future AI driven offerings.

Agicap

Agicap a cash management company is using LLM powered AI Assistant to answer questions like how can I save more? Do a forecast for next month? Which suppliers to use for optimizing spend?

PhonePe

PhonePe has leveraged a Generative AI powered Bot called Freddy to resolve its customer service queries. Freddy resolved approximately around 850 types of queries like “What is my balance?”. Approximately 80% of PhonePe Queries are resolved by Freddy and it has much higher CSAT scores that the traditional channels.

Saifr and Redoak Compliance Solution

Saifr and Redoak Compliance Solution are being used by client advertising firms to monitor the promotional communication and advertisements for compliance failure. For example, advertisements with easy rich scheme, or retirement on a luxury yacht are example of regulatory violations which Saifir can easily identify.

Corlytics Regulatory Solutions and Leo All in One

Global firms must deal with 100s of regulation, and it can be a daunting task to ensure compliance. Corlytics Regulatory Solutions and Leo All in One provides a LLM powered solutions which can be embedded in compliance chains and throw alerts. There by making the compliance more manageable.

Visa

VISA has launched a Generative AI Enabled Visa Account Attack Intelligence (VAAI). VAAI generates a VAAI score for all CNP transactions which is a real time risk assessment score. This score is then used for upping the authentication factor.

Stock GPT

Stock GPT is an AI powered search tool which contains the earning releases, financial reports and other fundamental information about all the S&P and Nasdaq companies. Stock GPT can do market research, sector analysis and can provide investment advice to the customers. It has been found that StockGPT enabled portfolios are doing much better than other portfolios.

Active.ai, Now Gupshup

Gupshup provides Ai powered omnichannel conversational engagement solution in many sectors including Fintech. Gupshup lets customers discover financial products of banks and BFSI on platform like Whatsapp. Gupshup handles 4Billion BFSI interactions per month with 97% accuracy and has 50% increase in click to payment ratio.

Axyone.ai
Axyone uses Generative AI to help Assets Managers in ranking market assets. Using this ranking solutions Asset Manager can identify potential outperformers in the market and maximizing performance of their funds. The rankings also provide forecast drivers and provides the data which helped in making the prediction.

Summary

Artificial Intelligence along with Generative AI is poised to be the trend setter in rapidly evolving fintech landscape. Generative AI in financial sector will be responsible for finding the right balance between providing an Enhanced Customer Experience through real time personalization and ensuring that security, compliance and risk is contained.

It will also be helpful in a huge cost cutting by making the processes more efficient, fast and error free.

Finally, employees of fintech sector will become more efficient in finding knowledge about sectors, customers, compliance and thus can provide a more accurate and fast advice to their customers.

Thus, how a fintech company leverages the Generative AI will a key differentiator in quality of service it provides and directly impact its survivability.