Bots and beyond: How the AI revolution is shifting the paradigm for customer experience in smart banking

Today’s consumers are accustomed to smooth, frictionless online shopping – and they increasingly expect the same kind of digital experiences from their banks. Insider Intelligence found that 89% of U.S. consumers use mobile banking channels, and 70% said mobile banking is now their primary way of accessing their accounts.  

“Most people do not want to go into a bank to do banking. They want to be able to do everything on a mobile phone or a smart portal,” says Nilendu Pattanaik, Global Head of Business Applications Practice, Microsoft Business Unit, at Tata Consultancy Services (TCS).  

Once they open an app, customers expect an intuitive UI rendering smooth capabilities, an interactive, immersive experience that understands their preferences, and seamless connectivity between services, whether they’re checking a balance or applying for a new mortgage or a credit line/card. One of the key priorities of the modern payment sector is to build an e-payments society with seamless interoperability among e-wallets. 

Creating a first-rate, secure digital customer experience is a top goal for leaders across the financial services spectrum, from retail banking to commercial lending, investment banking, and wealth management. But achieving success isn’t easy in a highly regulated industry saddled with legacy technology and applications. 

“Most banks have very old infrastructure that doesn’t produce the data they need, to effectively engage with customers,” Nilendu says. In addition, banks struggle to maintain customer data privacy, security, and compliance amid changing regulatory requirements.  

By moving services to the digital platform and offering the whole nine yards of end-to-end fabric of data, process, AI, apps, and industry solutions on Microsoft Cloud with native persistency and interoperability, financial organizations can analyze customer data in one place and quickly develop the responsive capabilities their clients are looking for. 

At the same time, financial institutions must maintain secure and compliant environments while preventing fraud, giving bankers more time to focus on customer needs. According to a recent Microsoft blog, organizations can use identity, security, and compliance solutions in Microsoft 365 to have visibility into their threat landscape and leverage built-in AI and machine learning in Microsoft Sentinel and Microsoft Defender for Cloud to proactively manage threats and reduce alert fatigue.  

Modernization priorities 

Since legacy technology is often spread throughout the organization, bank leaders need to prioritize their goals and develop a rollout schedule for digital services. One quick win, Nilendu says, is digitizing as many paper processes as possible. Another priority involves improving services for retail customers, whose churn rate is often high. Delivering differentiated and customized services to customers is a key need for financial services institutions; AI enables this capability effectively with proactive analysis and feeds of behavioral trends monitored through machine learning algorithms. Banks can give customers a hyper-personalized experience by embedding AI into consumer applications. For example, Microsoft Dynamics 365 Copilot, the world’s first copilot in both CRM and ERP, brings next-generation AI to every line of business.

“As they analyze customer data, chatbots are becoming more intelligent and capable. AI-enabled Microsoft Dynamics 365 can help financial services institutions enable faster and accurate processing of large volumes of data powered with predictability for market sentiments and better investment options or portfolio rationalization for investors,” Nilendu says.   

In addition to responding to questions with information geared to customer preferences, today’s AI-enabled apps can initiate processes, such as opening or closing an account, credit card applications, etc., during online interactions. They can also assist bankers on phone calls, analyzing customer conversational data in real-time and recommending appropriate products and services. Some banks have added an app feature that allows clients to videochat with a live relationship advisor with the press of a button. Services like these can reduce churn, decrease human error, and provide real-time guidance for the lines of businesses. 

With the help of TCS and Microsoft Cloud, financial services organizations can develop these and other digital capabilities with low-code tools, quickly rolling them out across services. 

“Microsoft Cloud for Financial Services and AI-enabled apps of Microsoft Dynamics 365 powered with Microsoft Power Apps, Microsoft Azure OpenAI, Microsoft Azure Machine Learning, Microsoft Fraud Protection allow financial services organizations to efficiently build new applications and AI services and scale them across their customer relationship management and sales platforms,” Nilendu says. “AI-enabled smart banking services are revolutionizing fraud detection and risk assessment in financial services institutions by checking financial status, document verification, and risk-related activities of the borrower, and significantly reduce the non-performing assets by enabling early detection of possible non-payment of loans.” 

Microsoft Cloud also provides robust security controls and helps financial organizations manage compliance in an industry where local rules are proliferating and frequently evolving. 

“For regional regulations, such as the California Consumer Privacy Act or the European Union’s General Data Protection Regulation (GDPR), the platform’s applications are intelligent enough to understand which specific documents and contracts are impacted and recommend actions proactively” Nilendu says.  

By securely developing the right digital capabilities, financial services organizations can provide better service to more customers, enhancing their reputation and gaining a competitive edge. Working together, TCS and Microsoft can help CIOs select and implement the technologies their organizations need for success. 

“TCS is partnering with Microsoft to create secure and compliant next-generation solutions on Microsoft Cloud catering to the needs of financial services institutions across all segments of businesses globally,” Nilendu says. 

Learn how FSIs benefit from digital transformation on Microsoft Cloud led by TCS.