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Moving to the center of the customer’s universe

Data is to this century what oil was to the last one: a driver of growth and change. Flows of data have created new infrastructure, new businesses, new monopolies, new politics and—crucially—new economics.” - The Economist, May 2017

If you subscribe to this ‘data is the new fuel’ analogy like many have, you are already aware that companies in all different industries are spending (or planning to spend) a significant level of investment in AI initiatives. Giants such as Google and Baidu spent $30B and $20B respectively on AI in 2016, according to McKinsey, and investment is expected to grow by 300% in 2017, according to Forrester. The cost of doing nothing is exorbitant. In the same report, Forrester predicts insights-driven companies will 'steal $1.2B' from competitors annually by 2020.

What’s motivating so many companies in all different industries to jump on the AI bandwagon? We believe one of the primary drivers is to deliver a fundamentally different experience for their customer - one that focuses on growing the relationship and meeting the needs of their customers when and where they are.

Imagine an illustrative customer scenario: Beth and Jason realize they are quickly outgrowing their space with a growing family. Do they look to buy a bigger home, or do they increase the footprint of their existing home?

Intelligent Bank Scenario
Figure A: Typical Customer Interaction with the Bank vs. Future AI-Enabled Relationships
Today: The couple in this scenario go through a series of tasks and activities to help them make their decision, ranging from doing their own research, talking to friends and family, going to different websites to find rates, home prices and other pieces of data. The first touch point the financial service company has with this couple is when they finally decide on a mortgage or home equity line. In other words, at the end of that entire customer journey.

Tomorrow: Imagine if you as the financial institution can move up front in the decision-making process. Perhaps serving as an enabler for helping to optimize the decision and lay out all the scenarios. An AI-enabled bank anticipates the needs of a customer and brings a set of tools and data together to empower and inform the customer along their journey - not just at the end of it.

The benefits of re-positioning the role of the bank within this customer journey are immense. The financial services organization evolves from being a transactional entity to one that is focused on building the relationship and meeting the customer where they are (Figure B). In other words, you as the financial services provider are able to move to a more strategic, proactive and relevant position.

Re-Positioning Your Brand Enabled by AI
Figure B: Re-Positioning Your Brand Enabled by AI
So where do you as a business start on this journey? It ultimately begins with what value you want to unlock and a use case that will highlight your organizational aspirations. One way to determine where and how to focus is through the use of an innovation agenda framework that brings together customer, business, and trend analysis to pinpoint opportunities to test.

Once you identify the right use case, you want to enable that experience in the best way possible - allowing for experimentation, quick pivots, and speed to market. We would propose an investment in the foundational technical building blocks that enable faster software production releases, and easier integration of systems and data through APIs.  These core capabilities allow you to experiment faster and with greater efficiency. This platform approach also enables more consistent customer touch-points across digital channels. Our Intelligent Bank Platform strategy brings together those building blocks (Figure C) and enables you to start your journey towards becoming a smarter financial institution.

Building Blocks to Building a More Intelligent Bank
Figure C: Building Blocks for a More Intelligent Bank
So you want to fundamentally change the relationship you have with your customers leveraging AI as a means to re-position your organization at the center of a customer’s experience. How do you go about doing this? Here are 5 things you can do today:

1. Look at your options, but avoid locking yourself into a specific AI vendor solution. The switching cost of a misaligned vendor solution is high.
2. Identify a customer pain point that can benefit from a more proactive relationship with the bank powered by better insights and a suite of relevant third party services.
3. List the services, APIs, and experiences you want to bring together to create the optimal customer journey.
4. Establish a mechanism for experimentation so you can quickly connect to the right services and APIs and test them in the market to get quick learnings.
5. There’s no doubt about it - this is challenging work. But, broken down into manageable parts, it’s easier to get a meaningful win sooner rather than later.

Disclaimer: The statements and opinions expressed in this article are those of the author(s) and do not necessarily reflect the positions of Thoughtworks.

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