Tech buzzwords aside, the bank hopes bots are the answer to improving customer loyalty and system-wide productivity.
Data analytics is a cornerstone of the New Gilded Age. Made possible by powerful, ubiquitous cloud-computing networks, it takes the guesswork out of tricky choices.
Erica is one manifestation. She’s your personal cyber-banker. She’s on duty 24/7. And she’s slick.
She lives inside a secure mobile app on your smartphone. The chatbot knows all the intimate details of your finances. And she is always learning, and you can chat with her through text or voice.
Erica may suggest moving money to save you from bouncing a check. Or she may recommend a way to help you to save for a rainy day. She can even help improve your FICO score.
The A.I. bot signifies a new trend in financial services.
Banks are building new products to cater to tech-savvy customers who live in an on-demand world. To get there, they are reaching into the public cloud.
There was a time when banks didn’t dare move mission-critical applications to the cloud. It seemed too risky. So they stuck to email and non-core applications, like business support networks.
Cloud computing has helped Bank of America launch an AI cyber-assistant that acts like a personal banker for customers.
However, in April, UBS Group AG (UBS) announced it was moving risk management, the most important part of its business, to the Microsoft Corp. (MSFT) Azure Cloud. A few weeks earlier, JPMorgan Chase & Co. (JPM) had already begun migrating its wholesale trading applications to the public cloud.
According to Dana Deasy, JPMorgan chief information officer, it was simply “time to move.”
There are obvious benefits. At large enterprises, CIOs appreciate not footing the bill for constant IT infrastructure upgrades. And better cybersecurity is a win.
However, the biggest allure of the public cloud comes from the ability to scale powerful computing power to run data analytics.
With it, it’s a snap to use prescriptive modeling to build targeted marketing campaigns. And it’s easy to mine historical data sets to find indicative patterns, too.
When Erica seductively suggests you move money from your savings account to checking, based on recent transactions, she’s tapping these tools. The software is drawing an actionable insight, in real time.
The demo makes it seem effortless. Sort of like a duck moving across the surface of a pond. While there may not be much action up top, beneath the surface those spindly legs and web feet are kicking furiously.
The power of the New Gilded Age comes from cloud computing.
The cloud has democratized the tools of big data. Any company can use them to build new products, services, or business models.
As for investors, they must prepare to reap the benefits. Most of the really big gains lie ahead. The process is just beginning.
Companies will move workloads to the cloud. They will re-imagine their business models to the great benefit of shareholders.
My job is to find these companies. It is what I do every day for my Pivotal Point Trader members.
Today it’s banking and chatbots. Tomorrow it may be another sector, another business underappreciated by current investors.
The Financial Select Sector SPDR Fund (NYSE:XLF) fell $0.14 (-0.61%) in premarket trading Thursday. Year-to-date, XLF has declined -1.55%, versus a 5.24% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Jon Markman’s Pivotal Point.