Artificial intelligence has the power to “transform” customer support from a “reactive relationship to a proactive one”, Eligible co-founder, Zahra Hassan, has stated.
In an interview with FTAdviser, Hassan explained the value of AI in financial services, specifically, how it could be used by banks to identify customers at risk of defaulting.
She explained: “AI can detect those who are likely to need assistance and proactively engage with them, fostering education and active dialogue.”
This would be instead of banks providing support only when the customer asks for it.
The issue of defaulting
Explaining the issue of defaulting, Hassan stated: “The fundamental problem is that mortgages are a financial product that customers take out once every three to five years.”
This means customers are not regularly engaging with their mortgage and are not “in the loop” of what their options are, she argued.
This need to identify vulnerable customers has only increased as Hassan explained: “Under the new regulations of consumer duty, there is a heightened obligation for banks to be more proactive in supporting their customers.”
AI as a solution
“What AI can do today is interact with customers and measure the level of understanding of their existing product before providing bespoke financial expertise,” she explained.
“AI can be used to detect how well people understand their financial product and use this data to spot vulnerable customers in order to better educate and support them.”
This was received positively by some in the industry such as Oportfolio content and communications director, Louis Mason.
Mason praised the technology's ability to identify vulnerable customers earlier and help them, “hopefully by qualified advisers with their best interests at heart”.
Market Financial Solutions chief mortgage officer, Michael Cook, shared similar positivity: “We are in the age of data, and data can be very useful.”
Additionally, The Excell Partnership practice mortgage planning consultant, Robert Moyse, stated: “Identifying mortgage customers who are at a higher risk of defaulting can be extremely beneficial both to lenders and borrowers.”
Concerns
However, advisers also expressed some concern over this use of AI, such as Mason who suggested that banks using the software could lead to people being “unfairly blacklisted” by lenders if they are going through a rough patch.
Additionally, Moyse stated: “I believe the best solution currently is a reasonable balance of using AI tools coupled with (rather than instead of) traditional techniques.”
He explained this means using the tools as part of a process to reinforce and validate decisions, rather than “accepting outright the predictive results provided by algorithms".
In response to some advisers expressing concern about the use of AI, Hassan stated: “When it comes to AI in banking, it’s all about the application.”
She acknowledged that Generative AI, which outsources language and customer conversations, does raise concerns about clarity, transparency, and alignment with values.
However, she went on to explain that the “true power” of AI lies in its ability to process vast amounts of data efficiently, thereby making it valuable for enhancing customer experiences.
She added that it has the potential to act as a “processing powerhouse” which could reduce the need for extensive internal data teams and benefit customers by providing insights and solutions.
Additional benefits
Hassan additionally stated that, while banks “excel” at providing tailored support to large corporations or private banking clients they do not do so well when dealing with a large customer base.
“Hiring a lot of account managers isn’t feasible”, she explained.
“What’s needed is an active two-way dialogue, and AI-powered systems like Eligible facilitate this by initiating interactions with customers and monitoring their responses to gather insights,” she added.
“For instance, we proactively send educational content to customers to access their anxiety levels and their understanding of their current financial products.
“Based on this information, we can fine-tune our approach by crafting more personalised educational content and adjusting our tone to be softer, supportive, and empathetic.
“This way, borrowers can better appreciate that lenders are here to assist them.”
tom.dunstan@ft.com
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