STAMFORD, Conn.--(BUSINESS WIRE)--Banks, financial services firms and insurance companies are looking to adopt and scale AI to better serve customers and make operations more efficient, two new studies from leading technology research and advisory firm Information Services Group (ISG) (Nasdaq: III) reveal.
Presenting the findings of the studies at the ISG TechXchange: Banking, Financial Services and Insurance (BFSI) event yesterday in New York City, the leaders of ISG’s banking and financial services and insurance industry advisory practices said enterprises are using AI and new technologies to fuel improvements in customer service and internal operating models.
“Rapid changes in technology have customers expecting personalized services, quick responses and 24/7 availability,” said Owen Wheatley, lead partner, ISG Banking and Financial Services and co-host of the ISG TechXchange. “To deliver those experiences, banks are deploying AI, machine learning, next-generation analytics, mobile and digital platforms and virtual assistants.
“In addition to adding emerging technology to their arsenal, much of the activity over the next 24 months will be internal, focusing on operating model changes to drive greater employee productivity and support better customer engagement,” Wheatley said.
The ISG Buyer Behavior Study of global banking leaders shows two of the top three activities to improve customer experience and customer performance indicator scores in 2024 are human-led. More than half (51 percent) the respondents said they plan on investing in customer data and/or experience platforms in 2024, and nearly as many – 48 percent – said building a customer-centric culture will be a top priority for their organization. Thirty-seven percent will prioritize realigning internal operations to meet customer expectations.
While banking leaders have already deployed AI across areas including security and fraud (66 percent), predictive analytics (57 percent) and sales and marketing (54 percent), the ISG survey found future AI investments will be primarily directed at meeting customer experience goals.
The majority of respondents to the banking survey (86 percent) said generative AI will be transformative for the financial services industry in the next five years, and 36 percent say it will be a “game changer.” Thirty-five percent of respondents indicated their organization is actively researching use cases for generative AI, and 34 percent are piloting one or more generative AI use cases.
Similarly, the ISG Buyer Behavior Study on Insurance found global leaders in that industry expect generative AI to impact both customer and employee engagement over the next three years.
Forty-one percent of respondents to the insurance industry survey said generative AI will have a significantly positive impact on the claims management process, and 39 percent expect it will have a similar impact on insurers’ ability to personalize customer experience. In addition, 33 percent of respondents say generative AI will have a positive impact on both customer service delivery and policy administration and employee productivity.
Survey respondents said that moving cloud migration and training to steady-state operations will free project time and budget for more innovative transformation technologies. Seventy-seven percent of insurers also indicate a focus on talent retention rather than acquisition (including retention of experienced talent) will be an important priority, while 72 percent said developing talent internally and refocusing on local hiring (55 percent) were also important.
“While AI and automation can greatly enhance efficiency and provide tailored experiences, the human element is irreplaceable in both customer service and transaction decision-making. The key is to find the right balance between technological capabilities and genuine human interaction,” said Dennis Winkler, ISG Insurance practice lead and co-host of the ISG TechXchange. “Insurers see a blend of human and digital interactions as the best approach, using AI for routine tasks and queries but directing complex or sensitive issues to humans who have been adequately trained and equipped with the skills to use the new technologies.”
The ISG TechXchange: Banking, Financial Services and Insurance event is sponsored by Hitachi Vantara, Infinite, IBM and Xebia. CIOInsights, CIOReview, Artificial Intelligence and Applications, and the Technology Business Management (TBM) Council are media partners. Additional information is available on the event website.
ISG Buyer Behavior Research combines the results of surveys of senior-level global executives with expert ISG research and analysis on market trends and strategic business initiatives. Earlier 2023 studies explored cost optimization, cybersecurity, global capability centers, network modernization and the future workplace.
The 2023 ISG Buyer Behavior Banking Industry Study interviewed 121 decision makers from the world’s largest banking institutions in October 2023. The 2023 ISG Buyer Behavior Insurance Industry Study was conducted globally in November 2023 and surveyed 120 executives with decision-making responsibility. Contact ISG for more information on ISG Buyer Behavior Research.
About ISG
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 900 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,600 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.
