In an era where technology and innovation are taking every industry by storm, it is inconceivable to think of a world that existed without the internet, mobile phones, and other modern technology, including banking, financial services, and insurance (BFSI) sector for which the use of innovation and artificial intelligence (AI) technology has emerged as the leading facilitator for financial inclusion.
Nearly 87% of financial services consumers begin their journey online, with two-thirds finding online channels more helpful for purchase decisions. Additionally, about 40% of consumers use search and 31% use online videos to help them with decision-making, a report by Google and McKinsey & Company reveals.
The report titled ‘AI revolutionises inclusion and profitability for financial services’ also suggests the integration of AI with digital solutions is set to enable India’s BFSI sector to unlock the potential of its entire spectrum of products for India’s over 700 million internet users. This is built on the understanding of the customer preference for digital exploration of financial services.
“India’s extraordinary digital adoption and the success of UPI have paved the way for the BFSI sector to serve the needs of millions of internet users for whom digital has become the go-to channel for information on financial solutions,” says Bhaskar Ramesh, director, Omnichannel Businesses, Google India.
The report combines analysis of Google Search trends, revealing online demand exceeded total purchases across all product categories by 3-5 times in 2022.
Credit cards, home loans, and car loans were amongst the most searched products, enjoying the highest growth rates in online demand, with searches focused on factors like innovative features and prices, says the report.
Ramesh adds, “As one of the early adopters of foundational tech, the BFSI industry is well positioned to integrate cutting-edge AI to create end-to-end omnichannel customer journeys that are personalised, privacy-preserving, and secure for customers, and profitable for the industry.”
On the other hand, products with an established digital presence, such as life insurance and savings accounts, saw relatively lower online demand, but with much of the online interest being brand-specific.
The report also highlights the untapped digital demand across 18 categories of financial services, ranging across loans, insurance, deposit accounts, and investments like stocks and mutual funds, and brings light to the potential for AI integration to bring more inclusive, customised, and relevant experiences to approximately 300 million active internet users who are not yet availing BFSI products, such as retail loans, health insurance, life insurance, fixed deposits, and UPI.
On the economic effects of the rapidly evolving technology, McKinsey Global Institute had also predicted early in June 2023 that generative AI is set to add up to $4.4 trillion of value to the global economy annually.
Risk and rewards
Although, it is essential to point out that the majority of economic reports on generative AI for the most part do not take into account the risks that emit from this technology, including inaccuracies and optimising fraudulent practices.
“While AI can significantly enhance security, it can also be used for malicious purposes – to create highly convincing emails or adapt malicious code to specific targets or changing security conditions, for example,” shares Merium Khalid, director, SOC Offensive Security, Barracuda.
Whether the AI pendulum will swing towards its miraculous potential to augment the capabilities of individual workers and transform the anatomy of work, or towards the riskier aspect of cultivating misinformation and escaping human control, as some experts suggest, only the next 5-10 years will tell.