In their constant search for new opportunities to maximize profits and cut losses, businesses usually turn to digital technologies. Thanks to recent advances in artificial intelligence, companies can optimize their routine operations, enhance security, and streamline business analysis, among other invaluable benefits. The scope of implementation of AI in FinTech is pervasive, and its advantages are undeniable. As a result, artificial intelligence has already achieved wide-scale adoption, and it is expected to become a critical requirement for financial business in the next three years. In this article, we will review the most popular uses of AI in the financial industry, along with its advantages, challenges, and future prospects.
AI in the FinTech Market
Fintech is an extensive concept that encompasses the implementation of various digital technologies in the financial services industry. These days, artificial intelligence, Big Data, blockchain, cloud computing, and the Internet of Things are the top five technologies that represent the leading trends in FinTech. Among them, AI arguably has the most diverse implementations thanks to its crucial role in data analysis and process automation.
One of the beneficial features of artificial intelligence is its ability to effectively cooperate with other digital technologies. Such cooperation greatly enhances the range of tasks that AI can perform. So, thanks to this feature, artificial intelligence has become a versatile and invaluable tool for the purposes of security, customer service, audit, and many other aspects of FinTech.
The Role of Artificial Intelligence in FinTech
These days, companies of all sizes seek ways to optimize business processes with the help of digital solutions. As a part of digital infrastructure, artificial intelligence plays an essential role in many financial processes. Of course, the ultimate role of AI-powered solutions is to increase the profitability of companies through a range of benefits and business opportunities.
The recent survey of 500 financial services professionals conducted by Statista revealed the most acknowledged benefits of implementing AI in the respective industry. Here are the results of the survey and some other applicable advantages in the context of FinTech:
Better customer experience.
Improved operational efficiency.
Lower costs of running a business.
Gaining a competitive advantage.
Access to accurate predictions and analysis.
Discovery of new business opportunities.
Improved risk management.
Better security of assets and property.
These and other benefits offered by digital technologies have revolutionized the financial sector. Even the oldest banks started investing in FinTech and shifted their operations from traditional “pen-and-paper” manual approaches to automated methods.
Opportunities Presented by AI in FinTech
Thanks to the constant development of artificial intelligence, AI development companies keep devising new ways to implement it in FinTech.
Customer Experience. AI-driven chatbots are typically the first thing that comes to mind when considering the implementation of artificial intelligence in FinTech and other industries. However, having an AI-based personal wealth manager that analyzes your income and spending behavior is a financial service that has a prominent future. Artificial intelligence can also be successfully used for offering personalized investment advice that considers numerous variables like the client’s age, location, financial history, education, interests, risks, trends, and so on.
Risk Management. Artificial intelligence is vastly beneficial for every financial institution as a risk management system. The AI algorithms can gather and analyze the client’s financial history to make better decisions on whether they are eligible for specific loans. Credit scoring and automated loan processing empowered with FinTech AI or machine learning models can significantly minimize and even eliminate the risks associated with loan approval.
Fraud detection. Fintech companies need custom AI-empowered fraud detection software for successfully fighting cases of account botting like creating bot networks and fake accounts, online payment fraud, identity theft, and others. Here’s everything you’d like to know about fraud detection with machine learning and AI.
Innovation in Services and Products. Artificial intelligence algorithms boost the efficiency and quality of market research, customer surveys, trend analysis, etc., to create new offers that better fit customer demands. Additionally, AI takes significantly less time to generate multiple results and recommendations based on the analyzed data.
Market Expansion.AI in the FinTech market is widely used for more efficient and reliable market research, customer surveys, and trend analysis to expand the business reach with fewer or zero risks. AI-driven forecasting helps banking, financial, and other institutions to open offices in new locations with a favorable business climate.
Regulatory Compliance. Custom AI systems vastly increase the quality and effectiveness of anti-money laundering (AML) and know-your-customer (KYC) guidelines. The system verifies customer documents by comparing them against various internal and third-party registries within minutes and helps the manager or the automated system make better-quality decisions on each client.
Automation of operations. Despite the fact that the implementation of artificial intelligence reduces the need for staff, it won’t replace qualified specialists. On the contrary, it only helps to accelerate processes like decision-making and data analysis. Thus, it serves as an assistant rather than a full-scale employee replacement. Most importantly, AI systems eliminate human errors that may result in money or reputation loss.
Enhanced security of computer networks to prevent breaches and data leaks is also one of the perks of using artificial intelligence in FinTech companies. The AI-based system effectively detects anomalies when employees perform actions like logging in, requesting specific information, etc., as well as protects the entire company’s infrastructure from malware.
AI and IoT for the security of offices and branches. Surveillance, face recognition, behavior analysis, and other security things are already widely and successfully used in FinTech and many other industries. Automated security protocols are designed and used to prevent and neutralize armed robberies and thefts, which is especially important when the company deals with enormous sums of money and the sensitive personal data of thousands of clients.
AI Use Cases in FinTech
Nothing proves the validity of a concept better than successful real-life implementations. Below are a few examples showcasing the use of artificial intelligence in leading financial enterprises.
AI Assistants and Robo-Advisors
These customer-oriented solutions may take the form of a separate mobile or web application, but more often, they are integrated into a more complex online banking app. Usually, they communicate with customers via in-app chats, mobile notifications, or SMS. These FinTech AI assistants enable personalized approaches to improve customer experience and cover many vital issues, from account security to financial advice.
Many banks employ such multifunctional chatbots as their 24/7 customer support. Among them is Bank of America with its AI assistant Erica available for customers via a smartphone. Capital One offers Eno, a chatbot available both on the bank’s website and inside a mobile app. A standalone service Cleo is an AI-powered personal finance assistant available as a mobile app.
Create high-end software solutions for your company with Intellectsoft
For obvious reasons, financial enterprises do not specify the details of their security systems. However, most of them prefer to announce the implementation of AI solutions to prevent fraudulent activities. This way, FinTech companies attract clients and partners and send a warning to potential lawbreakers. For example, both PayPal and Mastercard use data processing systems that employ AI and ML for real-time detection of possible fraud attempts and other suspicious activities.
AI Tools for Regulatory Compliance
Similar to the previous type of AI solutions, many FinTech companies employ the same technologies to meet applicable legislation. Many states enforce strict rules regarding data protection, anti-money-laundering (AML) measures, know-your-customer (KYC) processes, and other programs that are compulsory for the finance industry. To comply with such laws and standards, providers of financial services use AI analytics combined with machine learning and Big Data technologies. For example, JP Morgan has an AI Research team that creates synthetic datasets for further use in AML, fraud detection, and other programs.
Challenges and Ethical Considerations
Though AI-powered fintech solutions have proven their reliability and improvement potential, many experts are concerned about related ethical issues and challenges. These problems slow further development and limit the scope of AI applications in FinTech.
Issues regarding data privacy and security. First of all, AI involves gathering and storing large amounts of data, which requires adequate security. Additionally, FinTech AI solutions are allowed to access financial information, so they can be used as a proxy by hackers to steal this data.
Machine logic vs. fairness. AI decisions can be biased due to the flaws in algorithms and learning strategies. For example, when calculating credit scores or authorizing loans, AI may be discriminatory due to its reliance on statistical methods rather than a personalized approach to every specific situation.
Regulatory challenges. As digital technologies improve, governments pass more laws to regulate the use of sensitive information and enforce transparency and accountability. Providers of financial services must ensure that their AI solutions comply with the growing list of rules and regulations.
Less human employment. Artificial intelligence performs most tasks faster and better than human workers. Some may see it as “job stealing,” which presents an ethical issue considering regular surges in the unemployment rate.
Future Prospects of AI in FinTech
Numerous use cases prove that FinTech and AI are already inseparable, and the bond between them will continue to grow. The ongoing improvement of artificial intelligence is the hard requirement for this technology to remain efficient in all its current applications and discover new beneficial implementations. Below are several promising trends that will shape the future of AI in FinTech.
Improvement of Natural Language Processing
One of the current tasks of engineers is to simplify communication between AI and people. To engage in productive conversation, computers must learn to interpret human languages more accurately, take the context into consideration, and remember previous dialogues with every particular user. As one example, the development of NLP technologies will bring new capabilities for AI chatbots thanks to better speech recognition.
Focus on Deep Learning
To improve artificial intelligence, machine learning methods also have to evolve. Deep learning involves using multi-layer neural networks to analyze information, similar to thinking processes in a human brain. This is vital for financial services since data processing is the core task of AI in FinTech.
Further Automation of Financial Services
One of the ultimate business tasks of AI is ensuring high efficiency and profits for FinTech companies. To continue this trend, companies will increase the level of automation using bots integrated into the corporate infrastructure.
More Accurate Predictive Analysis
As a result of improved machine learning, Artificial intelligence will be able to perform more complex analysis and make more weighted decisions. This is especially beneficial for robo-advisors, risk management, and other financial aspects that depend on accurate predictions.
Closer Cooperation with Blockchain Technology
Further advances in AI and blockchain will improve automated secure transactions with high transparency. This is beneficial for every implementation that involves regular payments, which is vital in our era of subscription-based services.
Final Thoughts
Artificial Intelligence has already transformed the entire financial industry across the globe and continues empowering it with new enhancements. The automation of crucial processes, security increase, improved data analysis and forecasting, and better customer experience via personalization are only a few advantages from the long list for every fintech company that has already adopted AI or is considering it.
Being a company with over 15 years of experience in the Internet Technology market, we have delivered more than 600 digital solutions of different types and complexity in FinTech, healthcare, construction, logistics, eCommerce, and many other industries.
Intellectsoft provides solid digital solutions to companies of all sizes – startups, SMBs, and enterprises. Thus, here you can get your custom solution for business needs – from a simple AI chatbot to complex enterprise artificial intelligence software.
To learn more about our software development expertise, check out the most prominentcaseswe have already delivered to our clients, including Fortune 500 enterprises.
So, what can we do for your business together with artificial intelligence? Our AI-driven bespoke solutions include:
– AI chatbots and apps;
– Cloud-based AI models;
– Visual information processing;
– Deep learning and neural networks;
– Data generation and augmentation;
– Predictive ML models;
– Raw data and data analysis management;
– AI enterprise apps, and a lot more.
If you want to start empowering your business and future with AI FinTech, get in touch with us and tell us your requirements, goals, and needs. As soon we analyze and estimate the information you give us, our solutions advisor will reach out to you with our custom solutions and recommendations designed specifically for your case. Let’s make your business benefit from everything artificial intelligence offers.
FAQ
How is AI used in FinTech?
Artificial intelligence has many uses in the financial service industry. The potential applications cover customer support, risk management, regulatory compliance, market research, and many other areas. AI is also vital for ensuring effective measures to prevent fraud and money laundering.
Are there AI solutions for FinTech clients?
AI chatbots have become a standard feature of most online banking apps. They offer personalized support, including wealth management, investment advice, security control, and many other features. Thanks to Natural Language Processing, artificial intelligence can engage in a human-like conversation. Some financial AI assistants cooperate with the Internet of Things, so users can easily talk to them using Amazon Alexa or Google Assistant.
The hospitality industry depends a lot on keeping customers happy, but it’s getting harder to attract and keep them. The pandemic hit this industry hard, and now market competition is tougher than ever, with competitive offerings swaying customers. Hospitality businesses are willing to spend big to win customers back. The main questions for many are: how can we stay ahead of the competition, keep our customers, and increase revenue? Keep reading—we’ve got some answers.
Customers today have so many options that getting their attention is a real challenge. It’s not easy to make them choose your business over others. What worked 10 years ago doesn’t work the same way now. Back then, people often chose businesses based on reputation. But with new types of businesses (boutique hotels, craft cafes) popping up or big enterprises getting a new strategy, expectations have changed. The good news is these businesses have shown what works: great customer service. They focus on personalizing the experience, making things easy for customers, offering loyalty programs, and using smart technology.
In this article, we’ll explore these tech strategies and show you how they can help your business grow, and double the revenue. Keep reading to learn more!
The Importance of Customer Satisfaction in the Hospitality Industry
Customer satisfaction, which equals exceptional customer experience, is the backbone of the hospitality industry. It plays a central role in driving revenue and loyalty, as satisfied customers are more likely to return and recommend a hotel, restaurant, or other hospitality business to others. In fact, a study by the Harvard Business Review found that a 1% increase in customer satisfaction can lead to a 0.5% increase in revenue. Moreover, loyal customers are more likely to forgive mistakes and continue doing business with a company, even if they experience a negative encounter.
Let's quickly review the challenges the hospitality industry is facing right now so we can move on to the solutions and our case studies.
Challenges in Hospitality
As businesses navigate the changes in the hospitality industry, there are some key areas where a little improvement can go a long way. From improving customer service to embracing digital transformation and tackling labor shortages, we’ll take a closer look at today’s biggest challenges—and, more importantly, how technology can step in to help. Let’s get started!
Poor Customer Service
Even with strong and high-quality business offerings, poor customer service can drive potential customers and existing customers away. Common issues include:
Long wait times in customer service queues (it is worth remembering that our attention spans 8 seconds, and we live in a very busy world, so quick and efficient responses are more important than ever.)
Poorly trained customer service representatives
Lack of follow-up
Services not being done properly or quickly
Recall issues that require multiple service calls
These problems can frustrate customers. But, at Intellectsoft, we believe that the right approach, combined with technology, can address them effectively.
Digital Transformation Gaps
Approximately 50% of hotels are adopting new technologies, with 43% automating repetitive tasks and 39% upgrading existing systems. Source: workstaff.app
While many businesses are adopting digital solutions, some still struggle with outdated systems and fragmented data. Legacy companies often face chaos when trying to manage their data and create new systems or add features.
Some of the recent examples include clients coming to us to create AI solutions for their services while their data simply was not ready for the advanced tasks. We advise stepping back, communicating with a company objective, and working on keeping the data clean (centralized, structured, and segmented).
When we’re asked to create advanced systems using AI, we always emphasize the importance of organized data. To train AI and build such complicated systems that truly work, you need to start from the very beginning—collecting, storing, centralizing, and organizing it. We encourage our clients to align all departments to work internally on the data so we can create a unified digital system that delivers personalized experiences.
If you’re unsure where to start with your data, we can help. Collecting feedback at various touchpoints along the customer journey is crucial for gaining insights into customer satisfaction and loyalty. Book an IT consultation with us, and our experts will guide you in mapping out a path to get more from your data and build a system that works for your business and team.
Reskilling Staff
The pandemic hit hard in early 2020, especially for the hospitality and travel industries. Even five years later, many businesses are still feeling the impact. Recruiting and retaining skilled staff has become a major challenge post-pandemic.
Reskilling to address technology’s impact is of utmost importance, as about 40% of hotel General Managers place it among their top three workforce challenges.
We strongly believe that adopting the right technology can help. For example, creating an app to train your staff not only saves time but also ensures consistency in learning. AI assistants can also work alongside your team, helping with tasks like recruitment (providing industry insights, crafting emails) and staff training. Imagine having an app dedicated to making your team’s work easier and more efficient!
How Technology Tackles These Challenges and Supports a Customer-Centric Hospitality Culture
Automation, AI, and similar technologies may threaten many. However, the debate about replacing humans isn’t about that—it’s about cooperation and working hand in hand with technology to achieve the highest standards and establish brand-new “golden standards.” Technology is here to assist staff in listening to and collecting customer insights from data.
Let’s review some of our cases to see examples of how technology helps improve customer experience and supports customer service.
Examples of Intellectsoft projects
Property management systems (PMS)
We created a web platform and mobile app that makes managing daily tasks easier and offers extra services to improve residents’ experience. It gives a clear overview of daily activities and helps with managing units and users. Residents can easily book amenities, submit service requests, and report incidents. The platform also includes features for equipment management, key instructions, workflows, and custom permissions. This makes it easier for staff to stay on top of equipment and ensure residents have all the information they need. Plus, tools like announcements, quick votes, a forum, and a community calendar help build a connected and engaged community.
Guest Experience Management App
Our next app helped our client improve their guest experience by replacing printed marketing materials and the need for phone calls with a smart solution. Now, guests can easily order in-room dining, make reservations, and interact with staff— through a simple tablet in their room. The solution includes three parts: a custom in-room tablet with a variety of services, an admin panel for hotel staff and service providers, and a backend system that connects everything together. This approach makes things easier for guests and staff, improving both convenience and efficiency.
Existing Customers First: Building Loyalty with Personalized Touchpoints
Keeping existing customers is not just a strategy; it’s well-known that retaining existing customers is more cost-effective than acquiring new ones. In fact, research shows that it costs five times more to acquire a new customer than to retain an existing one. KPMG named customer retention as the number one revenue driver for the company.
Moreover, a 5% increase in customer retention can lead to a 25% to 95% increase in profits, showing the significant impact loyal customers can have on a business’s bottom line. Retention strategies, like personalized experiences and loyalty programs, can foster long-term relationships and generate recurring revenue, ultimately making them an invaluable part of any business model.
Personalization: How Technology Can Help?
Everyone loves to feel special—it’s part of being human. In hospitality, personalization has evolved from being a luxury to an essential standard. With the right technology to manage your data effectively, you can deliver those “wow” moments that guests won’t forget.
More than half of hotel chains are already using personalization features on their websites, booking platforms, and apps, and another 39% are planning to follow suit soon. They’re tailoring experiences to fit guest preferences perfectly.
Source: Deloitte
How does technology make it happen?
CRM Systems: They help you keep track of guest preferences, booking history, and special requests so you can offer services tailored just for them.
Loyalty Programs: Personalized rewards and offers show your guests that you value them, keeping them coming back for more.
AI Personalization: AI analyzes guest data to predict what they’ll love (from room upgrades to local recommendations) before they even ask.
IoT Gadgets: Smart room features like voice-activated assistants, or temperature controls adjust to your guests’ preferences, making their stay more comfortable.
With tech-powered personalization, you’re building loyalty and maximizing the lifetime value of every customer.
Our Case Study: Smart Hotel Management & Loyalty Program
For one of our clients, we created a smart room solution, complete with a custom IoT system. Guests can use a mobile app to control services, explore amenities, and find resort information-- with a special touch to their suite type. For the client’s entertainment business, we improved their legacy software by running a full IT and code check, fixing issues, and making the system better for customers.
Along with that, we developed a mobile app for the loyalty program, allowing businesses to effortlessly reward their customers and keep them engaged with exclusive benefits.
Our solutions not only helped the client with special experiences for guests; it also improved operations, cutting costs by eliminating inefficiencies. Here's what our experts shared:
"We transitioned away from ESB (Enterprise Service Bus) systems, which previously cost millions, and replaced them with more efficient, self-managed solutions. Similarly, we’ve implemented Device Farms that improved operations and saved resources."
Leveraging Software to Increase Upsell Opportunities
Here are some examples of tech tactics that will help your team sell more and introduce new offerings to existing customers, improve overall efficiency leaving your team grateful:
Dynamic Pricing Algorithms
For finance and marketing teams, manually calculating pricing by segment to introduce your clients can be incredibly challenging. AI-powered tools can strongly optimize these strategies by analyzing your database in detail.
Upselling via Apps
Boosting revenue in the hospitality business often comes down to personalized experiences. Imagine this: a guest books a room, and then your app suggests a spa package or a room upgrade at just the right moment. Later, it nudges them to book a dinner reservation or a guided tour designed to their preferences. With apps offering these personalized recommendations during and after bookings, you’re not just increasing your revenue per guest but also skyrocketing their experience. And you do it in a sustainable way, not by speculating, but by offering what your customers desire based on their previous experiences. It’s a win-win: seamless, helpful, and far from pushy.
Inventory and Resource Management Software
Making every resource count in your hospitality business is key. Inventory and resource management software allows you to effortlessly track everything from linens to room availability, ensuring nothing goes to waste. Having real-time insights to reduce overstock, avoid shortages, and optimize operations assists sustainably keep everything under control and know what you need to focus more. It helps maximize room occupancy by aligning bookings with available resources, ensuring every room and item is used effectively. This approach leads to smarter management, better guest experiences, and a noticeable boost to your bottom line.
Adopting these strategies not only optimizes your operations but also drives business growth. Ready to discover how technology can elevate your goals? We’re here to create a tailored solution for you.
Steps For Implementing a Customer Service Technology Solution
Improving customer service in hospitality doesn’t have to be a daunting task. With the right technology, you can smooth the path of your operations, speed up response times, and elevate the overall guest experience. Here’s where you can make it happen:
1. Understand Your Needs
Start by identifying the challenges your business is facing. Are you struggling to manage high volumes of inquiries, track customer feedback, or personalize the guest experience? Pinpointing your needs will guide you to the best solutions.
2. Pick the Right Tools
Choose technology that aligns with your goals. Look for solutions that are scalable, easy to use, and integrate effortlessly with your current systems. Options like CRM software, live chat tools, or a guest experience app can make a difference.
3. Equip Your Team
Technology is only as effective as the people using it. Train your staff to make the most of the new tools, so they can deliver exceptional service and resolve issues quickly. Confident, well-equipped staff creates happy, loyal customers.
4. Keep Improving
Once implemented, monitor how well the solution works. Are response times improving? Are customers more satisfied? Regular evaluations will help you fine-tune your approach and keep things running harmoniously.
Some Tech Ideas for Hospitality Businesses
CRM Software: Manage customer interactions and preferences.
Guest Experience Apps: Delight guests with personalized experiences right at their fingertips.
Amenity Management Systems: Simplify operations for everything from room service to facility bookings.
Live Chat Tools: Offer instant support and answers.
Social Media Management Tools: Keep customer interactions engaging and organized.
Integrating these strategies will not only improve your customer service but also deliver unforgettable customer satisfaction, loyalty, and, ultimately, your bottom line. Ready to take the next step? Book a consultation with our experts.
Conclusion
To wrap up everything we've discussed, customer satisfaction and experience are at the heart of hospitality. Retaining customers is more than just keeping them around—building strong, long-lasting relationships and consistently meeting their evolving needs. By understanding their pain points and offering personalized solutions, you can inspire loyalty and drive progress. With the right technology and continuous improvement, your business can stay ahead, let go of what no longer serves you, and keep growing.
At Intellectsoft, with over 17 years of experience in software development, our expert team is ready to help. We create everything from mobile apps to full-fledged portals and systems, leveraging the latest technologies like AI, Cloud, and Machine Learning. With deep experience in the hospitality industry, we’re here to craft personalized solutions that bring your business unforgettable customer experience and retain your valuable clients.
Ready to double your revenue and level up your customer retention strategy with personalized technology? Contact our experts, and we look forward to working hand in hand with you to build or revitalize the perfect app or system for you.
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