By Jeremy Thomas (pictured), Regional Director at Backbase
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ICT spending in Australia is on the up and up – the good folk at Gartner expect it will hit $147 billion in the current calendar year. If they’re right, that’s an increase of 8.7 per cent on the previous year’s outlay.
One of the biggest investment drivers across the board is Artificial Intelligence (AI) – the game changing technology that’s rapidly and inexorably changing the way businesses and organisations of all stripes and sizes manage their operations and engage with their customers.
Gartner predicts that by 2028, one third of interactions with GenAI services will invoke action models and autonomous agents for task completion. With unified, real-time access to bank-wide data, knowledge, tools, and workflows on certain banking platforms, AI Agents can already understand and interpret contextual information to provide personalised responses.
Here in Australia, all signs suggest financial services providers will be among its earliest and most enthusiastic adopters, as they aggressively seek out opportunities to incorporate it into their operations, right across the enterprise.
Here are three things ahead-of-the-curve players will be focused on over the next 12 months.
AI-driven recommendation engines
Providing considered guidance to customers on the products and facilities that will best meet their needs has been the name of the game for full service financial institutions since day dot. It’s what they pride themselves on doing, and introducing AI-driven recommendation engines can help them do it smarter, faster and better at scale.
Analysing customers’ individual cash flow patterns allows these engines to identify intelligent ways for them to save, spend and invest, in a fraction of the time it would take a human teller or bank officer to produce similar insights.
It’s a great way for financial services providers to add value; one that’s likely to be extremely welcome in today’s tight times, when finding ways to make the most of every dollar is an urgent imperative for millions of Australians.
It’s also an unparalleled opportunity for organisations to personalise their services, at a time when doing so has never been more important. The local financial services sector is fiercely competitive and a consistently excellent customer experience is very often the X factor that determines whether customers remain loyal long term.
Agentic AI
In recent years, local banking providers have invested heavily in digital solutions that make it super simple for customers to self-serve – think apps and platforms that allow them to manage their cards, make payments and apply for finance. It’s a development many customers have welcomed and one that’s allowed institutions to contain their overheads and generate enormous productivity gains.
But there’s a perception that, in the rush to digitise, financial institutions have lost the human touch. Agentic AI can help them regain a semblance of it, at a price that’s palatable to C-suite leaders and shareholders who know the days of heavily staffed branches have gone and won’t be coming back.
We see a future where AI Agents will work autonomously in the background, handling tasks, managing processes, and collaborating with customers and employees. The adoption and evolution of these new-gen, super-powerful agents will dramatically reduce internal and external labour spend on overheads such as sales, marketing, customer service, and compliance operations.
Hence, we can expect to see widespread deployment of AI-powered customer service assistants that can serve a similar function to relationship managers. With minimal human intervention, they’ll be able to provide improved customer interactions and enhanced support; adding dynamic personalisation to self-serve interactions and freeing employees in branches and service centres up to focus on non-standard and value adding activities.
Differentiated service models enabled by AI
All customers are not created equal, but you wouldn’t know it, from looking at financial institutions’ service models. Sure, they’ve been segmenting their bases into a few broad categories – retail, business, agriculture, health, wealth – for decades. Beyond that, though, customers have largely been given access to the same products, apps and experiences, regardless of whether they’re young adults fresh out of university or mature Australians at the other end of their working lives.
The adoption of unified platforms with AI-powered data analytics capabilities will see all this start to change over the next 12 months. With this technology in their toolkits, banks will have the capacity to extract actionable insights that enable them to segment customers at a much more granular level. Instead of delivering a limited suite of standard customer experiences, they’ll be able to engage with them at key stages of their life journeys and offer products that meet their financial needs in those moments.
And if they choose platforms with composable, pre-integrated customer experience capabilities and out-of-the-box journeys, delivering those personalised customer experiences efficiently and cost effectively at scale will become a straightforward proposition.
