Artificial intelligence is one of the most formative technological innovations of our time, and it’s changing the way we innovate – not only in the future, but already in the present. In our recent webinar, Minsung Cho, Head of Innovation Design, and Marcus Walbröl, Head of Product Design, explored how financial services institutions can use artificial intelligence to enhance their products and deliver a tailored customer experience through contextual experiences.
As Marcus Walbröl steps on screen, he opens the floor with a few questions. “Have any of you ever felt underserved by one-size-fits-all banking solutions? Or found modern banking experiences to be a bit too generic?” He’s greeted with nods from the audience of our webinar, “Innovation with and for AI”. Plenty of retail banking customers have had underwhelming experiences with supposedly modern banking apps or struggled with a clunky interface. Although banking decisions are highly personal, tied to how you spend money, whether you take care of kids or family members, where you live and work, and how you want to retire, it all too often feels like banking is a one-size-fits-all experience.
But generic banking is about to change, Marcus explains, and sooner than some of us might think.
The drivers of the smart contextualized experience in banking and financial services
With the rise of artificial intelligence, big data analytics, predictive software, location technology, and voice recognition, customers increasingly expect that banks meet their unique needs with tailored products. “Whether it’s predicting financial requirements or tailoring products to fit the context,” Marcus explains, “my life is changing, and I want my banking experience to adapt.”
Marcus and Minsung, co-heads of the design function at SAP Fioneer, call this trend “the rise of the smart contextualized experience.” To meet rising expectations, banks will need to incorporate emerging technology and artificial intelligence to design products from the customer’s point of view, whether that be with goal-oriented savings plans, personalized investments, or customer support enhanced with artificial intelligence.
“With AI, we can finally create experiences that adapt,” Marcus says. He highlights Klarna’s new financial app that features both personalized shopping recommendations and financial management tools in one place. With AI-driven solutions, banks can deliver personalized insights, recommendations, and, with regulation pending in the future, even advisory services. “At Fioneer,” he explains, “we try to understand the true meanings of financial interactions to build software solutions and create experiences that really resonate.”
Benefits for both financial customers and banks
For customers, contextualized experiences tend to make banking easier, more enjoyable, and accessible. “Like controlling your device with a simple hand gesture. Or the voice interactions that revolutionize the way we interact with a given device,” Marcus explains. “Our voices are the new touchscreens. When we move beyond flat screens, augmented and virtual reality combine the real world with possibilities, creating experiences that are more engaging and interactive.”
As a result, rather than finding themselves frustrated with reactive, more basic digital services, customers experience banking that adapts to their location, chosen device, and past interactions with financial services. A banking app might direct a customer to the nearest ATM, or provide them with a personalized currency exchange rate based on their location and country of residence.
Customers aren’t the only ones to benefit from the smart contextualized experience. Financial institutions are complex institutions themselves, with countless internal processes supported by software — so banking and insurance business users also benefit.
To illustrate, Marcus points to Fioneer’s AI Agent, which processes complex accounting data based on prompts (instructions) in natural language and delivers results in the same form. Before, with vast amounts of Excel lists, the process could take hours and require deep technical knowledge. “Now,” he says, “it takes seconds.”
Challenges and considerations for success
But designing a contextual experience isn’t easy. “You always have to match the user’s purpose with the right interface,” Marcus reminds the audience. “Whether it’s a chatbot, a spoken command, or a fully immersive experience, you want to align the interface with the user’s needs and context.” If you do it wrong, they’ll be confused. But if you do it right, the interface can surprise and delight them with a unique user experience.
Mastercard did this exceptionally well with the launch of its in-car embedded payments, he points out. Instead of asking customers to swipe their cards to pay at the pump, the company collaborated with Mercedes to create a location-linked service. Now, when a customer drives into a Mastercard-connected service station, their Mercedes infotainment interface automatically links to their fuel pump and creates a streamlined, seamless payment experience.
The future of the smart contextual experience
What’s next? In the future, Marcus predicts, banks will no longer only react to customer input. Instead, they’ll rely more heavily on AI to understand their customers’ needs and design predictive services. “Imagine a digital assistant that knows what you need before you even ask for it,” he elaborates. “Today we have personalized content, but soon, AI and machine learning will power dynamically adjusting interfaces tailored to each customer.” Picture chatbots, super apps, augmented reality, and IoT-enabled products.
Next-generation banking, in other words, will adapt to humans, not vice versa. In this world, banking products automatically learn from customer behavior and evolve to meet their needs and preferences. “One-size-fits-all is gone,” Marcus concludes. “In its place, you’ll have the smart contextual experience. You’ll be able to provide customers with intuitive, tailored, proactive experiences.” He pauses. “The possibilities are endless.”
But we know possibilities aren’t enough: they need to come to life in a way that respects the organizational and regulatory reality of global finance. That’s why, at Fioneer, we recognize that innovation with and for AI must remain legally feasible, even when it’s on the cutting edge of the contextualized experience.
Leveraging AI in financial products
Are you curious about how to incorporate AI into your product innovation process and can’t wait for part two of this series? Skip the reading and jump right into the webinar “Innovation with and for AI” or contact us directly for more detailed questions. We’d be happy to see how we can help.