[AI IN ACTION] Financial firms embrace AI for personalized services

Financial companies in Korea are increasingly embracing AI to improve efficiency and offer personalized services, with AI projected to reach $2.35 billion by 2026. Various firms are focusing on AI digital assistants.

A customer taps on a kiosk featuring an AI digital agent at a KB Bank branch in Yeouido, western Seoul [KB BANK]

Financial companies are utilizing artificial intelligence (AI) to raise work efficiency and to provide more personalized services in a society where digitalization has come to determine a company’s future growth.

They are still in the early stage of utilizing AI but agree on its importance, saying a company’s ability to use the technology will be indicative of corporate competitiveness in the future.

Currently available services include the chatbot, where banks handle customer inquiries and complaints through AI. But financial companies are promising more diverse types of services in the near future.

For instance, you will have a digital assistant who processes financial transactions based on orders made through vocal commands on a banking app. You will also get daily updates on your asset portfolio performance and be personally informed of upcoming financial transactions, like an expiration date for a subscribed fund or the amount of your daily spending.

The AI in the domestic finance industry is projected to grow 38.2 percent annually to reach 3.2 trillion won ($2.35 billion) in 2026, according to Korea Credit Information Services. AI will largely center on digital banking, it said.

Different financial firms are focusing on different kinds of AI-driven services.

KB and Shinhan Financial Group are zoning in on AI digital assistants.

KB Kookmin Bank featured a virtual human at a kiosk at some branches from 2020 through 2022. The digital assistant was a pilot project in a bid to test the service through trial and error.

The service, which has now been pulled out, involved welcoming customers and introducing them to financial products.

KB bank is currently developing an AI digital assistant to be featured on its banking app, scheduled to launch later this year or in the first half of next year at the latest. It will be driven by ChatGPT, which will be used to respond to customers' inquiries.

The biggest challenge in developing the service was to bring out smooth communication as nonverbal communication accounts for around 93 percent of the entire interaction, according to KB Bank’s Financial AI Center Managing Director Oh Soon-young.

“We plan to make it more sophisticated using AI technologies. For instance, when [the AI digital assistant] senses other people near a customer during a financial transaction, it will first ask, ‘can I proceed with the transaction?’”

Oh added developing AI is important for financial firms because “bankers have to focus on high value-added tasks and use technologies to handle tasks in a time of a declining working-age population. We’re currently in the stage of finding ways to efficiently perform the service.”

KB will also use ChatGPT to process work-related questions employees may have with a goal to raise work efficiency, the bank added.

Shinhan Financial Group’s AI focus is on Robotic Process Automation (RPA), which consists of various services including an AI digital assistant.

The digital assistant at Shinhan helps automate the work process for employees on their computers.

The service helps employees quickly perform their jobs by providing customized services for different departments upon their request.

For instance, the AI division developed a technology that automated a printout of a list of loans extended and withdrawn, reappraisal of collateral and customers that need to renew their fire insurance.

Through the AI, Shinhan Bank was able to automate an average of some 11,000 cases per month and save 13,400 hours across its branches, according to the bank.

Screen captures of Hana Financial Group's robo-advisory service on its banking app [HANA FINANCIAL GROUP]

Another area of AI that is heavily invested by financial companies is asset management.

Hana Bank runs AI Wealth, which offers a robo-advisory service that recommends an investment portfolio for customers, after they input their interests and risk appetites for the program to process.

The bank does not recommend specific stocks, but instead suggests funds, and the portfolio is rebalanced once every six months.

Hana Bank does not charge a commission fee for the robo-advisory service, but collects commission when users sign up for a fund.

“AI Wealth is a hyper-personalized service that recommends various products based on the AI’s analysis of a customer’s investment tendency and assets,” said Lee Eun-jung, head of the Hana Bank Investment Product Service Division.

“The biggest challenge in using an AI is market projection as a myriad of variables affect the forecast, and the connecting links [that affect the market] change frequently. But AI is making endless progress and is becoming more sophisticated, which we believe will raise customers’ trust in robo advisers.”

The most important AI project for Woori Financial Group is chatbot, according to the company.

The chatbot is featured with speech-to-text, text-to-speech and natural language understanding functions when serving customers.

It can also help with year-end tax adjustment, a feature newly added in January.

“Expansion of digitalization and contact-free channels raised the number of consultation cases, and the number of contact-free touchpoints with customers is increasing,” said Woori Financial Group about the reason for its heavy investment in AI chatbots.

“The most important factor in the development of a chatbot is quality learning data and continuous management. Our goal is to create a chatbot featuring a generative AI that can freely make conversation,” Woori added.

“AI is becoming a single platform that will determine the success or failure of a company in the future,” said Lim Jong-in, distinguished professor at Korea University School of Cybersecurity.

“Firms that fail to adjust to the AI environment will face similar consequences as those that failed to adapt to the era of the internet and mobile phones when they were introduced,” Lim added, noting Sony .

BY JIN MIN-JI [jin.minji@joongang.co.kr]