To start with, machine learning (ML) is now one of the most advanced technologies that are widely applied to different industries.
Basically, that’s because it has high effectiveness, provides valuable benefits, and enhances the processes automation to ensure better performance for any industry.
According to McKinsey, one of the industries that need ML implementation the most is the finance and banking industry.
As the sector operates tons of personal data, and billions of critical transactions every second, it becomes especially vulnerable to fraud activity. Scammers are always seeking its weak points to crack the servers or get the valuable data for the blackmailing.
However, because of its innovative characteristics, machine learning can greatly benefit financial industries by detecting and preventing such fraudulent activity, thus improving the entire system security.
In this article, we will discover how this process works and the main ways machine learning in finance can be used.
Let’s start right now!
What to Know About Machine Learning in Finance & Banking
Machine learning in finance is now considered to be one of the anchor points of different fields of finance and banking services as it performs critical tasks which include transaction processing and calculation, risk evaluation, and even behavior prediction.
Being a subset of data science, machine learning has also the ability to learn and improve from the experience without being programmed, which means the technology will be improving systematically.
Machine learning along with the entire artificial intelligence (AI) development, now radically changes and improves the traditional processes of financial services.
One of the critical aspects is detecting the fraud activities, providing the instant response to any suspicious actions, and getting plenty of valuable insights to learn from for fighting further cases of such activities. Here are some examples of how it works:
Learns from the payment data to perform the services automatically. For example, ML technology can process the payment details for providing the analytics services.
Detects the fraud activity and minimizes the risks of the intrusion into the payment system. For instance, machine learning can analyze the accidental false positives in fraud detection, thus preventing cost loss.
Respond to the unusual aspects of payments. For example, ask for double authentication to confirm and complete the sale transaction.
Thus, thanks to the process automation and deep learning features, fraud detection machine learning can greatly improve the quality of the financial industry services and minimize the risks of the third parties’ intervention to protect the most critical and vulnerable processes.
Fraud Detection Using Machine Learning: Main Tasks
The finance and banking industry consider machine learning to be extremely helpful in financial fraud detection. Unlike the other innovative technologies, it will never be outdated, instead, it becomes even more valuable after being able to analyze more complex cases.
Furthermore, the services which have been established on the hand-crafted rules, which are also known as “if-then” statements, with the ML technology will be performed automatically.
According to Deloitte this greatly reduces the risks of missing suspicious transactions, detects similar cases, and prevents new ones.
So, let’s now cover which tasks can perform machine learning for finance.
Decreasing the Cases of Security Breach
Fraud is one of the most common issues the finance industry usually faces with. By operating with billions of dollars, tons of personal accounts, and large corporations, it becomes one of the primary targets for fraud.
And, when technologies become more and more developed and powerful, the number of fraud attacks also increases.
In addition to that, most financial units tend to store the big data online, which only introduces additional risks to the security breaches.
With the machine learning systems implementation, financial institutions can get various technologies to combat the frauds, create a set of rules that will be automatically improved with the times and provide the highest level of security to it.
Basically, it works by comparing every new transaction with the previous (personal information, data, IP address, location, etc) and detects the suspicious cases which should be checked additionally.
As a result, financial units can conduct credit card fraud detection using machine learning.
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Nevertheless, machine learning and finance are not only about credit card transaction checking. It can also greatly benefit credit scoring automation, as it implies complex analysis of various data, such as personal information, payment history, current income, and even the credit history from other financial units before making the final decision about each case.
Machine learning can easily resolve this issue by involving various algorithms that are constantly improving to automate the process and enhance the quality of the credit scoring process, which means large investment savings and workflow enhancement for the financial units.
Besides, it can process not only the personal information of a debtor but also detailed processing of a person's social media accounts to issue the quality report of the data analysis.
And, fraud detection using machine learning makes it nearly impossible for scammers to influence the credit scoring process and make a profit from it.
Suggesting the Best Investment Strategies
Financial fraud detection is also critical while choosing the best time and areas for investing. Before making any investment it is significantly important to evaluate all the risks and benefits you can get from this process.
Furthermore, the fraudulent cases in the investment at present practically always lead to the irreparable loss of finances, and that is where machine learning in fraud detection can really make sense.
The financial advisory systems provide you with the critical data where the possible risks and benefits are analyzed using the machine learning algorithms.
So, people usually consider that specific technology while leveraging the large investments, like different retirement or student loans, trading, investing, etc.
Machine learning for fraud detection helps people make sound decisions for their high-value financial transactions.
Why Do You NeedMachine Learning in Finance?
As you can see, ML technology can also bring great benefits to the financial industry. Along with the most important benefit of financial fraud detection, it can also provide the banking and finance units with the following gains:
Assists in Processing Big Data
Because of the necessity to work with huge amounts of personal and corporate accounts, machine learning can save lots of time, costs, and effort by automating the process of data analysis.
Besides, the financial institutions will be also able to ensure the data is secure, and can’t be obtained by third parties.
Reduces the Possibility of Human Error
In the middle of the last century, human error was the #1 issue of why financial institutions experience losses. Machine learning can replace human work by automating the traditional process in this industry, which means a lower error rate.
Is Transparent and Bias-Free
The decisions made by the machine learning systems in some cases might produce better and more transparent results than human judgments, but make sure the application has gained enough knowledge for more quality biases.
Makes Valuable Predictions
By using the specific algorithms and previous experience analysis, machine learning can provide a list of suggestions that might prevent and alert the financial units about the possible outcomes in different areas, like fraud detection, investment predictions, and so on.
Thus, the finance and banking industry will be able to apply preventive measures or change the current state of affairs, thus, getting more benefit from it.
Saves Operational Costs
With automating processes using machine learning, you can effectively perform different tasks, improve their accuracy and save huge investments of this process that are traditionally analyzed manually.
Thus, along with applying machine learning for fraud detection, financial institutions will also get the profit from its use in automating the data processing, making transparent and bias-free decisions, predicting various issues, and eliminating human error.
Being aware of these benefits, it is now one of the most popular and important technologies for the finance and banking industry.
Conclusion
As you can see, financial fraud and machine learning are practically inseparable at present times. By applying various rules and synthetic algorithms, it becomes just a perfect technology for automated financial fraudulent detection.
Unlike the traditional system of analysis, which is mostly performed by human decisions, it allows covering much more information and processes the big data in shorter periods of time, thus saving lots of investments, resources, and time for the financial units.
Fraud detection using machine learning allows creating new rules and more complex algorithms for analyzing various transactions and suspicious financial behavior thus minimizing the risks of financial loss.
That is why financial software development is now the major priority for the finance industry.
Our best expert teams at Intellectsoft, empower different companies and their workforces with various innovative solutions and approaches to develop the exact products they need for improving their performance.
Do you and your organization need one to enhance your business development?
Feel free to talk to our experts to learn more about machine learning technology and how your business can start getting profit from it today!
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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