Zehra Cataltepe is the CEO of TAZI.AI, an adaptive, explainable AI and Generative AI platform. She has more than 100 AI papers and patents.

Artificial intelligence (AI) and generative artificial intelligence (GenAI) are reshaping the financial services landscape. Beyond enhancing customer experience, AI is transforming regulatory compliance, risk management and core business strategies. I aim to explore the tangible ways AI is revolutionizing the heavily regulated financial industry, focusing on how AI can be leveraged to improve both customer outcomes and regulatory adherence.

1. AI: A New Frontier For Customer Experience And Risk Management

AI is dramatically improving customer experience in financial services. Through personalized recommendations, real-time support and efficient issue resolution, AI is enabling institutions to understand customer needs and prioritize digital transformation initiatives that resonate with them. AI-powered chatbots and virtual assistants are becoming table stakes in addressing customer inquiries promptly.

AI’s predictive capabilities extend beyond customer service. By analyzing customer communications and complaints, AI models can anticipate which interactions might escalate, flag potential AML or other fraud issues and identify emerging trends in customer behavior, feedback or regulatory problems. This proactive approach allows institutions to mitigate risk, protect customers and improve customer experience.

2. Simplifying AI Adoption: From Executives To Agile Development

As an executive, you don’t need to be an AI expert to harness its power, so no need for that Python-based AI class. Today, a range of out-of-the-box AI solutions exist to address specific business requirements, such as retention, demand or fraud.

Your most important role as an executive is helping your team prioritize their efforts with the right AI solution KPIs and making sure that your teams follow an agile solution development cycle, which will allow you to see results in weeks, not months or years. Quicker results and tangible returns on investment get you the must-have board-level support and continued investment.

Here are two reasons why you can get results so fast now:

• Some GenAI solutions ensure data privacy by processing information locally, mitigating concerns about cloud security.

• GenAI is adding to agility by transforming the way AI solutions are created. For example, at my company, we can create initial solutions both for structured and unstructured data easily, thanks to LLMs’ capability to process both. GenAI is reducing the time spent for the initial value by reducing or zeroing the training data requirements.

You can start with a prompt that describes the problem to be solved and helpful insights, such as notable segments of different customers retained and churned. Considering the months spent processing the transactional data required to train the initial AI models, this is a huge breakthrough.

3. Breaking Down Silos And Reimagining Customer Complaints

Traditionally, customer complaints were viewed as a regulatory burden. However, AI-powered tools can analyze complaints holistically, identifying root causes and trends. By integrating complaint data with other customer communications and internal transactional data, institutions can prioritize issues that greatly impact customer experience and regulatory compliance, and make business decisions based on customer churn, risk and lifetime value prediction models.

AI and GenAI models deployed throughout the organization are dismantling data silos that have long hindered progress. By integrating information from various sources, institutions can generate valuable insights with AI, even with incomplete data. This is transformative in areas like mortgage and wealth management, where data integration has been a costly challenge.

4. Board-Level Considerations And Organizational Alignment

Implementing AI successfully requires alignment across the organization. KPIs, incentives and compensation plans will need to be adjusted to encourage collaboration and data sharing. Additionally, organizational structures may need to be reevaluated to ensure that AI projects are prioritized and integrated effectively.

Actually, all board-level discussions should focus on incentivizing collaboration between departments. For instance, improving customer lifetime value can become a shared KPI across departments such as fraud, marketing, sales and customer support, encouraging a unified approach to customer-centric strategies.

Conclusion

AI and GenAI are revolutionizing the financial services customer experience, risk management and regulatory compliance. Today, gaining value from AI and GenAI doesn’t require massive amounts of time, data, computational resources or deep expertise.

Financial institutions that embrace AI in an agile, holistic and compliant manner will be able to move quickly. This approach will not only enhance customer satisfaction but also provide an unparalleled competitive edge in an increasingly digital world.

Zehra Cataltepe

Forbes Councils Member

Forbes Technology Council

Also Published on Forbes: https://www.forbes.com/councils/forbestechcouncil/2024/08/14/reimagine-customer-experience-risk-and-regulation-in-financial-services-with-ai/