Three Ways Cognitive Banking Will Help Manage Your Life

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Computers have changed our lives over the past 50 years. Yet computing itself has not fundamentally changed, nor has banking. Until now. We’re entering a new era of computing, one we call Cognitive Computing.

Cognitive Computing changes the way humans and systems interact. Cognitive systems have the ability to understand natural language in order to interact better with humans, capture the expertise of top performers, build upon knowledge from structured and unstructured sources and to provide consistent, expert assistance. Already 89 percent of banks familiar with cognitive computing believe it has the potential to be disruptive to the banking industry.

What does cognitive mean to an average bank customer?

How often have you been put on hold by a bank, financial institution or credit card company, only to be switched around, put in another call center queue, and asked to repeat your information numerous times?

A cognitive bank puts an end to such delays because the bank recognizes you. It uses the ability to analyze big data with massive volumes of information from within the bank to better engage with you as its customer. When you contact a call center, it will not only know who you are, it will answer your questions during the first call.

A cognitive bank builds upon the personalization and digitization trends in banking over the last few years. And with the addition of cognitive computing, banks will not only know your name, address, and preferences for certain products and services, but also be ready to help you with the products or services you may need based on your current stage in life.

That means that no matter how you contact your bank, it is able to have a dialogue with you, and understand the context of your needs and your preferences as a unique individual. Such banks understand the value of information, and use data and analytics to develop insights, which makes it easier to provide the right services to help you to better manage your financial life.

Here are three examples of how cognitive banking will change your banking experience. They are:

1) Call Centers: A cognitive bank provides better information when you interact with its call center. The information will be automated. You will be talking to a machine, but not in the robotic ways of the past. Using natural language processing, the call center will both understand you and provide information that is far more tailored to you as a customer. If you allow it, the call will be able to incorporate information from your social networks and preferences — and use that information to enhance your experience and the advice you receive.

2) Customer Service: No matter how you contact your bank — whether it’s on your phone, through an app, or social media — you want a consistent and personalized experience. Service must be targeted to us as an individual, not as a member of a segment based on age or income. We want to be seen as individuals. Banks increasingly understand this and are providing personalized information, such as knowing when a young family member’s birthday is coming up or suggesting a transfer of money into a college fund.

3) Loans: By understanding more about you as an individual, a cognitive bank can write loans or approve credit, while helping avoid defaults or bad decisions. This high degree of personalization means that a bank will offer you the credit or loan services that you can afford. It’s banking for the right person, at the right price and the right time.

People live their life making economic decisions every day, whether it’s buying a house, getting a new car, or paying for college education. A cognitive bank will help you make those decisions. Banks will become a part of the decision-making process in an ongoing relationship that helps you to manage your finances over a lifetime.

We’ve grown to expect seamless experiences that captivate us when we purchase things online or in person. We’ve also grown to have deep trust in specific brands that align to our choices and our beliefs. Cognitive banks will modernize banking and become a part of our lives. Banking will no longer be about just transactions, but instead the interactions with you as customers.
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IBM will be talking more about “Banking in the Cognitive Era” as the world’s financial services leaders comes together in Singapore at Sibos 2015 to discuss this and other trends in next-generation banking.

To learn more about the new era of computing, read Smart Machines: IBM’s Watson and the Era of Cognitive Computing.