Banking sphere should keep abreast with the tendencies of digital technologies development, which can be explained by both external regulatory aspects and private interests. In his interview at AI Conference, Roman Davydov, an investment banker, Founder and CEO at SKOLKOVO Private Banking & Wealth Management Club, told about the way the progress changes the financial market.
Interviewer: AI Conference (AI)
Respondent: Roman Davydov (R. D.)
AI: Roman, is banking digitalization a forced or natural process?
R. D.: Application of digital technologies in Industry 4.0 is unavoidable. Particularly, in banking.
This is due to both external circumstances (for instance, regulatory) and overall digital transformation of conventional banking. Thus, online international exchange of tax information in terms of the CRS standards aimed at preventing a false transfer of taxable income to tax-free or low-tax jurisdiction in fact exemplifies cross-state digitalization.
More precisely, to reorganize risk management, standard procedures get automated. Human has only to control the system’s functioning. What is more, the most important stages are necessarily to be manually investigated by specialists.
Also, in most cases, digitalization improves service and open access to a new client segment (for example, millennials), reduces expenses, updates time management and boosts performance.
AI: In which way should the banking management strategy be changed in terms of the digital technologies advance?
R. D.: No doubt, this strategy should keep abreast with the tendencies of the global digitalization.
Currently, banks are suffering instability and tough competition. It makes them look for new ways of business development that have to include solving tasks related to risk minimization and boosting of profit gained by operations.
It is difficult to make decisions on such an unstable market. The majority of banks offers similar products and services for the same price.
Apart from extra risks, banks can have additional profit out of competition and market instability.
They are to provide a solution based on many aspects (risk, profitability, regulatory framework). This solution can be technologically complex. Here arises a need for value innovation as well as innovative products and their promotion. One shouldn’t forget about tough competition and focus on boosting a customer appeal of products and services.
AI: What are AI’s advantages for bankers and clients?
R. D.: Let’s take a look at an example. The previous year, a foreign company presented a prototype of a mobile app for financial assets management. It allowed to create and work with a financial portfolio in 3D environment by placing a smartphone in VR glasses.
Developers think that introduction of AI would make this process more intellectual. The development is aimed at processes automation and grants assistants free time in order to provide services with added value. This boosts performance of employees and reduces exploitation expenses.
In general, AI would allow end-use customers to get personalized offers via the Big Data-based ongoing training taking into account changing customer needs.
AI: Do we have any banking operations or directions completely digitalized? Could you please provide examples?
R. D: Concerning innovations, the previous case shows that most of them are directed towards user interface. Much attention is paid to VR and AR technologies. The world of finance and its leading players are contemplating their application.
Concerning a customer service package (in terms of mass market, for instance), mobile apps and services are offered in most cases. They involve more participants and simplify access to financial markets and banking services.
When developing a strategy, one should mind regulatory changes – for example, General Data Privacy Regulations (GDPR) in the EU. They will come into force this year touching upon all the players on the European market. Your company’s location doesn’t matter – if it processes and stores data related to the EU’s residents, this regulation is applicable. Many banks and businesses consider social media as a new channel to work with a target audience and attract new clients. That is why we should pay special attention to GDPR.
Visit AI Conference scheduled for April 19 and find out more about the synergy of smart technologies and banking.