The Great Resignation and the rise of AI in Financial Institutions

the great resignation and the rise of AI in financial institutions

With tech firms “reinventing our society” through artificial intelligence, demand for this skill is so great that banks are struggling to hire the people they need. Data science professionals are quitting bank jobs at record rates and financial institutions are having a hard time attracting new talent.

Exacerbating the problem is the early retirement trend of employees. In addition, the high cost of living in financial centers for young workers may scare them away, and the fact that employees are now frequently working from home makes it harder for managers to identify employees who are unhappy.

Plus, getting new hires up to speed with expanding regulations and years of lending business mastery ahead of them is more challenging when employees can’t always attend in-person training sessions or shadow experienced employees.

To solve all these issues and to stay competitive, financial institutions are increasingly turning to artificial intelligence startups. It not only improves the business performance, but also benefits the business culture, the employee happiness, and ultimately improves the customer experience.

The Great Resignation

The Great Resignation, which is also known as the Great Reshuffle, refers to an unprecedented resignation rate among employees that began in early 2021. Over 47 million Americans have voluntarily quit their jobs, spurred on by Covid-19, leading to worker shortages followed by a challenge to fill open roles up. It has become a defining trademark of the U.S labor market when the economy began to emerge from its pandemic hibernation from the increase in the vaccination rate.

To be fair, if you consider the total employment during the past dozen years, what we are living through is not just short-term turbulence provoked by the pandemic but rather the continuation of a trend. Financial Institutions need to be prepared for a long-term trend of shorter job tenures.

The most impacted functions in the Financial Industry are in niche technical areas, such as artificial intelligence and machine learning, which are in short supply and have shorter job tenure: a mere 1.7 years on average. Many banks have turned to alternative skill acquisition through startup partnerships to provide these specialized capabilities.

The rise of Artificial Intelligence

Financial Institutions CEOs see war for Artificial Intelligence talent topping the list of 2022 concerns. Organizations see how competitors are using data science to gain advantages, using machine learning and augmented intelligence to identify and profile potential customers, develop recommendations, forecast, identify fraud, and develop predictive strategies and models.

The solution lies not in just adding artificial intelligence to business processes but in shifting the way people use and view it throughout the workplace. To do so, embed artificial intelligence into processes to improve work and customer experience and turn them inward to support employees. It can not only transform workflows but turn the workplace into a more collaborative and rewarding environment for both employers and employees.

Freed from repetitive or routine work, employees are able to focus on more important tasks. Financial Institutions looking to attract and retain top talent can use artificial intelligence to create an improved employee experience and couple it with higher wages and flexible schedules to transform the Great Resignation into the Great Reinvention. In addition, companies can improve business workflows in the process, reducing costs and improving productivity.

Everyone Benefits from the Smarter Approach to using Artificial Intelligence

1. Employees

·        Increased employees’ satisfaction and retention

Boredom, monotony, and tedious activities like cleaning data and manual data entry all contribute to the Great Resignation. When you use artificial intelligence to automate tasks, employees can engage in more proactive planning and interactions like preparing incoming executive questions that require strategic thinking and personalized service.

·        Protected against worker exhaustion

Artificial Intelligence puts a stop to the feeling of wasted efforts, allowing employees to work on what they enjoy without being overwhelmed. The additional time saved is allocated to restructuring work, personal development, and team building exercises, relieving stress, and providing support.

For example, complex model development and regulatory compliance documentation can be automated using Artificial Intelligence, allowing employees to shine by putting the finishing touches, socializing the results, and getting ready to answer any internal or external audit questions.

·        Better work-life balance

Artificial Intelligence allows to speed up processes, which has become essential as many organizations are facing staffing shortages. Rather than force employees to work overtime, artificial intelligence makes it possible to get more done with fewer human resources. Employees can plan for extracurricular activities so they’re less likely to become dissatisfied.

2. Employers

·        Better business decisions 

Top executives and managers can benefit from analytics by gaining greater insight into lending strategies and lending performance. Modern intelligent automation platforms are equipped with process intelligence that allows organizations to deploy browser-based analytics on validated, compliant, and enhanced data across multiple sources. By linking data and metrics to strategies across the business, management and executives can predict the lending impact of external events (e.g. interest rate changes or new pandemic variant), and identify internal issues, so they can make smarter decisions. In other words, Artificial Intelligence quickly delivers the roadmap to lending success, reducing lending business failures and strategy iterations.

·        Improved productivity and collaboration among cross-functional teams

Artificial Intelligence-powered portfolio management software saves time by automating both the analysis and the reporting process. The information is immediately transferred to the required business systems. Employees and other production systems have immediate access to updated and relevant information, allowing them to complete their tasks more quickly and effectively.

For instance, some leading lenders have recently started to use a newly automated artificial intelligence system that includes advanced modeling techniques to automate strategy development workflows and save 3 months per lending product. Now new strategies can be deployed 80 percent faster than before.

Artificial Intelligence unites formerly separate business activities with linked systems, making it easier to get things done and exchange information. New cloud-based Artificial Intelligence platform, for example, allows employees to develop, share and validate lending strategies from any location, making it simple for project leaders, team members, and even entire divisions to work together more efficiently on new lending programs.

·        Reduced costs

Manual activities like forecasting, performance tracking, and model validation are completed faster and more correctly — and at a lower cost to the business — when workflows are handled by Artificial Intelligence. This leads to savings because of improved compliance, consistency with executive plans, and early implementation.

3. Customers

·        Improved customer experience 

Artificial Intelligence and predictive analytics are able to go further than historical data alone, providing deeper insights into what has already occurred, and what can be done to facilitate the customer lending journey through suggestions for related products, making the customer experience more relevant and more likely to generate a loan approval, as well as providing the customer with a greater sense of emotional connection with a Financial Institution.

By leveraging Artificial Intelligence / Machine learning algorithms, lenders can effectively identify and resolve problems that could lead to customer churn. Features like incomplete online application triggers and lending application decline analysis, for example, turn the loss of customers into valuable insights that can help you not only solve customer retention problems but also craft effective strategies to win them back.

·       Personalized lifecycle offers and life events considerations

Most lenders are either waiting for applications from potential customers or soliciting prospects through large marketing campaigns. The problem is that, even with the right marketing tools, you can’t deliver a customized message to every single customer on your list with the right content, at the right time of a lending need, and at the right place.

That’s where artificial intelligence comes in. AI makes it possible to produce highly personalized marketing material by analyzing topics of interest, current lending needs for planned and unplanned life events, and detecting patterns for relevant content.

Lenders are able to follow the consumer journey through lifecycle offers, anticipating a credit need (e.g. go to college, prepare a wedding, expand family, buy a house), or life event considerations to improve credit decision outcomes (e.g. temporary job loss, large medical bill or funeral payment).

Studies show that 67 percent of consumers think it’s important for brands to automatically adjust content based on context, so these types of changes can make all the difference.

·       Tailored communications and engagement

Machine learning, an Artificial Intelligence method, allows systems to use data to continuously improve their ability to recognize patterns and make decisions.

Conversational applications use ML to better understand human interactions. What is outstanding customer service? How can customer service be improved? How can lender responses be more accurate or personable? Machine learning helps the system train and anticipate customers’ questions over time. With revenue margin continuing to compress, Private Banking, which prioritizes customer engagement, will need to reimagine advice and relationship management through technology.

But beyond communication, Artificial Intelligence can help drive engagement by democratizing highly personable private banking services, usually only reserved for high-net-worth individuals, through digital banking for all consumers. In the near future, transactional, identity, and fraud data captured by AI will allow customers to customize credit availability and credit channel delivery. As an example, customers would be able to leverage a one-time instant credit access wherever they are, through their preferred channel (e.g. phones, cards…), for specific purposes and costs (e.g. large purchases, investments, travel…), without having the burden to pay long term credit access fees or be subject to fraud risk.

The Next Lending Evolution with Artificial Intelligence

From finance to marketing to credit risk, Artificial Intelligence helps employees complete their work more efficiently and effectively, allowing them to focus on expert input and communication. It also drives higher revenue for employers and helps customers access to credit.  The recent rise of Artificial Intelligence is the next lending evolution to solve talent retention issues and stay competitive. By improving your lending operations, your performance, and your products using Artificial Intelligence, you choose to make your employees and customers happier.

About Prometics

Prometics provides advisory lending services and the first Lending NavigatorTM. Our platform delivers the roadmap to lending success. It uses Artificial Intelligence to provide advanced and compliant lending strategies and forecasting within minutes instead of months, increasing revenue, and reducing costs. Prometics was created by financial professionals for the financial industry to provide faster, better, and easier credit access, business growth, and resiliency in today’s and future changing markets. We’re setting the new industry standard for lenders, investment portfolio managers, business advisory firms, and technology providers alike.

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