Fintechs and AI – A Smart Move for Building Societies and Credit Unions
There’s seemingly no end to the business applications of artificial intelligence. From fraud detection to forecasting sales and analysing consumer behaviour, AI has rapidly become a powerful tool for enterprises across the world. In recent years, building societies and credit unions have increasingly looked to AI as a way to modernise their operations and better meet customer needs. But a number of barriers have made this transition a challenge.
According to a survey by management consultancy zeb, almost two-thirds (63%) of UK building societies point to a lack of know-how and skills as key challenges to introducing AI. The same percentage also cite an absence of an AI strategy as a major barrier to implementing AI solutions.
By working with Fintechs and other tech providers, building societies and credit unions, too, can bypass legacy systems and establish a comprehensive plan for the implementation of AI. Earlier this year, Bath Building Society announced their partnership with fintech firm Festina Finance to transform how the society interviews potential mortgage customers.
Kevin Gray, CEO at Bath Building Society, says a lack of a good front end sales system for direct mortgages sales had been a barrier to growth for the society in the past. ‘This was all proving to be both inefficient and frustrating and we therefore had a clear need to do something to improve this position.’
The Festina software collects information about the customer’s financial situation and asks relevant questions on their views and understanding of mortgages and the overall economic outlook.
According to Gray, ‘The technology greatly reduces the possibility of errors in the sales process thereby enhancing compliance. The time taken to process an application has also been significantly reduced which will greatly enhance the productivity of our direct sales team and improve the customer experience at the same time.’
Mikael Braagaard, chief executive at Festina Finance, invites building societies and credit unions to look at how AI can bring about the right solutions, ‘we believe that the dialogue between the users and our software developers leads to state-of-the-art solutions in benefit for the advisors and the end-customers’.
In order to keep up with innovation from traditional banks and start-up financial firms, AI tools, like chatbots, can be adopted to more effectively reach customers and create a personalised experience. As many building societies have already discovered, AI powered tools can achieve everything from improving back-end decision making to enhancing the customer experience.
Regulatory reporting in building societies or credit unions with legacy IT systems can be an extremely laborious and manual process. Mansfield Building Society partnered with fintech firm Suade Labs to gain end-to-end automation of regulatory reporting by utilising the power of natural language processing, machine learning and AI.
It’s not just time-saving benefits that can be achieved from these solutions, with a more granular view of regulatory data now being possible, making the society better prepared to provide regulators or other stockholders information quickly.
No one-size-fits-all AI strategy exists for building societies and credit unions due to the diverse requirements of different organisations. But by identifying issues within an organisation, the right fintech partner can be sought out to fill in these operational gaps.
Join us on 6 October as we bring together a community of innovators to explore how fintechs and technology innovators can work with Building Societies and Credit Unions to deliver better outcomes for members, register now for FTT Building Societies.
Written by Finbarr Toesland, Editorial Contributor