Blow Out Productivity & Profits, The 2 Ps of Our New AI Reality. Success Metrics Are In!

Volume #10 Austin, TX October 26, 2024 --- AI is having a huge impact on a financial institutions bottom line. AI implementations are leading to increased profits and huge efficiency and productivity gains. Employees jobs are changing. Customers are benefitting. And it is all just beginning.

It has happened before. Technology has at several times in the past, fundamentally changed the world and how we produce things, how we work as people. The wheel. The plow, or more correctly, a specific type of plow, and well, just like that, farming is transformed…. Printing press, think of all those displaced scribes. What did they do afterwards? The good ones pulled a “Ben Franklin” and learned how to work a printing press. When the businesses decided to automate production and build factories, manufacturing technologies changed everything. Those coal-ridden times in Birmingham and Manchester were pivotal. And interchangeable parts, another huge manufacturing efficiency driver, even if chalked up to a firearm.? What about the cotton gin? Efficiency transformed, and we got cheap clothes to boot. The first time we used computers in a bank back office was huge, we’ve already covered that topic!!!? During these transitional times when innovation drives change, peoples’ jobs are displaced. And yet, over time, more jobs are created, and prosperity follows. Transformational.

Artificial intelligence is driving transformational change in the financial services industry. Here are a few headlines:

·?????? Sweden's Klarna Says AI Helps Shrink Headcount by 25%

·?????? A Merchant Chatbot Takes 70% of Calls For Bank of Ireland Payment Contact Centre

·?????? National Life Group Uses Legal AI to Improve Contract Turn Around Time By 71%

·?????? How Tata Mutual Fund Achieved 58% Growth in Engagement w/AI-Driven Solution

·?????? Centric FCU uses AI - Trims loan Application Times by 95%

·?????? Banco Do Brasil Uses Compliance AI to Reduces False Positives by More Than 90%

·?????? Hong Leong Bank Collection Agents’ Productivity Surges 15-Fold, Aided by AI

·?????? Michigan State FCU - Meet Fran, the CU virtual agent with a 98% resolution rate

·?????? TransPecos Banks To Drive $3M+ in Cost Savings w/Oscilar's AI

These results are not isolated. Searching For AI (SFAI) has collected 300+ case studies covering financial institutions live with AI and 60% of them have metrics attached. These metrics clearly demonstrate the success of AI. Success is happening in compliance and the contact center.? Legal is benefiting from AI as is the HR department and even engineering efficiency emerges with AI.?

Within the case study archive, SFAI has documented over 40 different types of ROI metrics used to track success. When a case study has metrics, 75% have more than two metrics and 40% have more than three. Some of the metrics are standard metrics we are familiar with however the numbers get blown off the charts when applying AI; sales goals exceeded by 400%, customer satisfaction rising 50%, reduce false positives by 95% and reviewing a contract 99% faster. Other well-worn metrics have been tweaked for AI, like chatbot metrics pulling from the call center; containment rates, deflection and event efficacy rates, all enhanced using AI. And some success metrics are again quite familiar but become enhanced with the use of AI. Lots of ways to track success. Metrics abound and AI success is verifiable.

With all this change, an FI’s highest-level metrics are transforming as well. Currently in the archive there are 20+ different departments using AI. There are 75 different use cases for AI. All yielding success. The individual gains at a department level can be rolled up and tracked with a few key data points; employee productivity, return on equity, growth rates and profit margins. A financial institution will realize transformational gains at the top of the house. Productivity, ROE, growth and profits. This is where true success will be achieved.

Some FIs are clearly ahead of the game given the success metrics being reported. That said, now everyone is participating, down to the smallest community financial institution. The largest global players have been at this for a decade. They’ve rolled out a myriad of AI apps from the contact center to the fraud monitoring department. Most likely, these FIs built an AI toolkit, enabling their developers and employees throughout the organization. And, they probably have thousands of resources dedicated to AI. For smaller FIs, there is great news. AI has democratized. The smallest community financial institution can now roll out AI and experience transformation. As mentioned, 300+ case studies and 130 different vendors. This amount of competition has rapidly led to AI being accessible to all. The AI platform is a collection of vendors, enabling all financial institutions to harness AI and succeed. It’s an AI ecosystem geared towards transformation.

If it were only so easy…. Success breeds hubris. Don’t get too bold. This is not Crypto, sorry the bold kinda got burned in that case. This is for real; AI is for real. Transformational. Stay focused on incremental department level gains eventually adding up to transformational organizational level impact. Stay focused on enabling the organization with the AI education and tools they need to lead the transformation. Yes, people will do the work. This change cannot be driven by machines. They are not smart enough, yet…. Transformation is simultaneously scary and exciting, so put all the hype aside and just have some fun as we all ride the AI wave.

Robb Gaynor, SFAI Publisher?

This week The Fintagonist is sponsored by the National Fintech Organization. The NFO is a non-profit, and sister brand to the Association for Financial Technology (AFT), dedicated to serving the fintech community. NFO provides resources and promotes innovation and advancements in the industry.

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