Artificial Intelligence (AI) has transformed the functionality of Financial Institutions (FIs). The report from Juniper Research has claimed that FIs will increase their regulatory technology (RegTech) expenditure by 124% by 2028. From augmenting the quality of services to utilizing customer data in the most efficient ways, AI is driving this transformation by enhancing service quality and optimizing the use of customer data, bringing unprecedented efficiency to FI operations through automation. However, can AI entirely replace the need for human judgment and intervention? Certainly not. Let’s explore why.

The integration of the human workforce with AI technology has proven to be a powerful combination for addressing fraud and risk management-related challenges within FIs. This collaboration has also paved the way for innovative methods to combat financial crimes such as money laundering. By leveraging the strengths of both human expertise and advanced AI tools, FIs are delivering superior services and products, leading to higher customer satisfaction and retention rates.

Here are the key areas where the human workforce and AI technology work hand-in-hand to streamline FI operations.

• AI-driven chatbots provide instant and timely responses to customers’ initial queries. The Springs report reveals that AI-driven chatbots can independently handle 70% of client requests, leaving room for the human workforce to focus on the remainder as well as act as an oversight.
• AI and human collaboration enhance decision-making processes. AI delivers data-driven insights, recommendations, and actionable options, while the human workforce applies strategic thinking and creativity to make well-informed, high-level decisions. Additionally, AI’s ability to detect fraud empowers FIs to make more precise and effective decisions in combating financial crimes. Within FIs a combination of AI and human expertise helps in managing false positives leading to a good Net Promoter Score (NPS) for FIs.
• AI streamlines repetitive tasks like scheduling and responding to emails, efficiently managing these time-consuming duties. This allows the human workforce to redirect their efforts toward more critical, strategic, and value-driven activities.
• AI powers straight-through processing systems enabling the automatic handling of data during financial transactions. This not only accelerates transaction speeds but also minimizes the risk of errors, leading to more efficient financial operations. By automating routine processes, AI frees up the human workforce to focus on resolving disputes promptly and addressing customer-specific needs.
• FIs are investing heavily in compliance systems with global expenditures reaching $206 billion annually as per Nearform’s report. The use of AI in compliance management has become increasingly reliable, particularly in navigating complex regulatory requirements. By automating processes, AI simplifies transaction monitoring and enhances efficiency. However, the human workforce plays a crucial role in overseeing AI tools to ensure smooth execution and adherence to compliance standards.

Agentic AI is the future of FIs, and we are standing on its edge. It can significantly improve the operations of FIs by automating tasks, enhancing decision-making, and personalizing customer experiences. As AI becomes more autonomous, it will drive efficiency, improve security, and ensure regulatory compliance.

The effective implementation of agentic AI can transform and optimize back-office operations by automating complex tasks that traditionally require human intervention.

By continuously learning from new data, agentic AI ensures that information is always up to date while freeing human workers from repetitive tasks. It intelligently extracts, validates, and updates information from multiple sources, minimizing manual effort. By leveraging date-driven insights, it enhances decision-making by identifying patterns, detecting anomalies, and providing predictive analytics. This enables organizations to optimize workflows, improve operational efficiency, and make faster, data-driven decisions.

“Survival of the fittest,” as simple as the saying goes, fits all disciplines. People, Processes, and Technology (PPT) are aligned together to optimize the operations of FIs. The introduction of advanced technology has created opportunities for the human workforce to embrace new tools and techniques in the most effervescent ways. Let us understand how the PPT approach can begin a transformational journey for FIs.

• Digital and tech-oriented skills – The workforce, empowered by the latest technologies such as AI, machine learning (ML), and Robotic Process Automation (RPA), plays a pivotal role in revolutionizing the operations of financial services, driving efficiency and innovation in ways that technology alone cannot achieve.
• Data Literacy – FIs invite customer data galore, but not every piece of information is relevant to FIs. With expertise in data analytics and data visualization tools, the human workforce segregates data, presents more data-driven decisions, and works simultaneously to derive valuable insights.
• Collaboration Approach – The productive collaboration of technology and human workforce has emerged to help FIs reach their full potential. Neither technology nor the human workforce can replace each other, instead they must work cooperatively. Humans bring their key focus on oversight, validation, and handling complex customer queries that require empathy and nuanced judgment which fills for where AI can lag.
• RegTech Awareness – FIs must stay informed about RegTech solutions, including regulatory monitoring, reporting, and compliance. With AI and human workforce, the detection of suspicious activities that restrict compliance becomes easier, further ensuring ethical standards for FIs.
• Customer Experience – FIs focus on elevating customer experience, and this can be best possible when technology and the human workforce work together. Using AI-driven insights, human employees can better understand customer needs, predict trends, and deliver personalized experiences, such as tailored financial advice, customized product recommendations, or more efficient loan approval processes.

AI itself won’t replace humans, but individuals who understand and effectively use AI will outpace those who don’t.

The merger of the human workforce and AI marks a significant milestone in the evolution of work and technology. This collaborative synergy is reshaping FIs, boosting productivity, and enabling new ways of problem-solving. Quinte Financial Technologies (Quinte) understands the importance of the human workforce in FI functions and brings its well-equipped 24/7 Service Desk, which includes the best banking adepts, to deliver the finest financial services by coordinating well with technology.

For more insights on the power of augmenting technology with human intelligence, feel free to contact us at info@quinteft.com to learn how our service desks can help you elevate operational efficiency.

– by Ankit Maharaj Singh
Senior Vice President, Strategic Growth

1. https://www.juniperresearch.com/research/fintech-payments/fintech-markets/regtech-market-size-report/
2. https://springsapps.com/knowledge/the-2024-guide-to-chatbots-in-banking
3. https://www.nearform.com/insights/how-ai-can-actually-accelerate-compliance-efforts-in-financial-services/