AI and Finance Will Bots Replace Humans

Technology has revolutionized the financial industry over the past several years.  Many of the tasks that banks used to spend time and money training employees to handle, such as dealing with customers on all types of issues, can now be managed through Artificial Intelligence (AI).  While fintech companies have been able to utilize technology to excel in important areas such as customer service, fraud detection and online banking, many experts argue that human contact still has a place in finance and not everything can -- or should -- be automated.

Finding a Hybrid Solution

While AI is certainly helpful and efficient in managing a large volume of customer service issues, the human connection is still a necessary component to keep in the mix.  As such, fintechs have been looking to integrate hybrid solutions where they can automate in areas where it makes the most sense and allow humans to handle the rest.  

Building and managing relationships and providing advice are still necessary elements in the financial industry, as 90% of Americans report that managing their finances causes anxiety.  While a financial advisor can help address this issue in ways a chatbot cannot, bots can assist advisors in becoming more successful and efficient, as they can handle the basic questions advisors may not have adequate time to deal with.  In a hybrid solution, financial advisors can use AI technology to identify issues and gather financial data, which will help them create better financial plans and options for their clients. 

Automation is key for customers who want an easy solution to managing day-to-day finances, such as everyday banking tasks, but human experts can help with special tasks, such as developing a saving plan, negotiating bills and navigating life events.  It’s important for customers to form relationships with their financial institutions since finance is so emotional for so many people.

Examples of good hybrid options

Quickbooks provides a good hybrid solution for bookkeeping.  Expense tracking and budgeting are easily automated, but the Quickbooks Live Bookkeeping offers small businesses help from financial experts.

Financial institutions also offer hybrid options to their customers.  Vanguard’s Personal Advisor feature connects customers with advisors via phone who then create a plan that can be followed automatically.  Schwab also offers an option called Intelligent Portfolios, in which users have automated investments while also having access to support from financial advisors.  

Fully-automated options

Although the benefits of hybrid are clear, there are some companies, such as Cleo, an AI financial assistant, who are striving to go fully automatic for their younger target audience.  Cleo aims to make its AI bot as personal as possible with the ability to answer users’ questions.  A machine learning department equipped with behavioral experts and writers develop the bot’s traits, which act as a replacement for human interaction.  The goal of the fully automated assistant is volume as Cleo aims to become the financial advisor for over a billion people.  Despite its attractive personality, Cleo’s offerings are somewhat limited.

New entrants to the market

Goldman Sachs is planning on getting into the AI game, as well, by creating a robo-advisor for passive investments to hopefully attract younger users.  It remains to be seen whether a fully-automated option will be enough for Generation Z when making complex financial decisions.  It is likely that the need for a real human will always be there.

Even Walmart sees the potential. The retail giant recently announced that it will be creating a fintech startup to service its consumers who don’t have a relationship with a financial advisor.    

Regardless of whether a financial company has robo advisors, human advisors or a combination of both, supplementing with additional services is a great way to add value to customer interactions.  ApexEdge can renegotiate your customers’ recurring monthly bills and you can pass along the savings to them.  Integrating technology into the investment advisory experience illustrates that financial institutions need both technology and humans to grow and thrive now and in the future.