The Applications of Vertical AI in Financial Services

5 min read

The financial services (FS) industry is steeped in complexity and ever-evolving regulations. From process inefficiencies to outdated legacy systems that require manual data input that hasn’t been maintained to a strong emphasis on personal relationships and customer service as the differentiator between firms, FS has struggled against the regulator’s tightening grip. But this is also why it’s perfectly primed to reap the benefits of vertical AI


Generative Artificial intelligence (AI) in financial services is like peanut butter in chocolate or sugar in cream. Although they can work independently, the combination is just that bit sweeter. 


OK, maybe we’re oversimplifying (and making ourselves hungry).


There are two types of generative AI: horizontal (or “generic”) and vertical (or “domain specific”). Though generic AI can be built into FS easily and efficiently, it doesn’t have the FS-specific trained data to support its models, which you’d find in vertical AI. 


The nuances of the financial services industry mean that a solution has many hurdles to jump and security measures to meet with the highest level of confidence. But that’s exactly where vertical AI excels. 


Vertical AI solutions are poised to revolutionise how banks, investment firms, and insurance companies conduct their operations. 


By harnessing the power of Large Language Models (LLMs) trained on industry-specific data, these cutting-edge technologies offer myriad applications that will dramatically enhance efficiency, mitigate risks, and elevate customer experiences within FS.


Auto QA

The financial services industry processes a lot of incredibly complex data. In fact, it processes a lot of data, full stop. Being able to reliably record and automatically assess the data that comes into your business is becoming the gold standard practice as this is something that FS has been historically bad at capturing mining for relevant information.


Vertical AI can automatically review and validate your documents against regulatory requirements, policies, and standard templates. It can identify errors, omissions, or non-compliant sections, finding key areas of risk.


This process eliminates random sampling and gives you access to 100% of the data that comes into your business and can prioritise your calls by risk. This allows your QA team to do what they do best, apply their expertise where it’s most needed.


Consumer Duty

Consumer Duty is a big deal. We’ve not stopped talking about it in what feels like forever. And with good reason. The Financial Conduct Authority (FCA) are implementing stricter guidelines and a spate of recent high profile action against firms who’ve been charging for ongoing services but without providing, or being able to prove they were providing, the service. 


This action from the FCA strikes to the heart of what Consumer Duty has been brought in to achieve. Aside from not providing fair value, are these firms ensuring their advisers are explaining what these charges are? Did they ensure the customer understood the cost/benefit of the service? 


Vertical AI can play an essential role in helping financial firms to ensure that they are not only providing fair value services, but that they are able to evidence that they’ve taken due diligence at every step to ensure the customer has the full picture. Vertical AI brings your business the capacity to analyse every customer interaction to ensure that you are consistently meeting compliance requirements. 


Vulnerable customers

One of the biggest benefits that vertical AI in financial services can bring to the table is its ability to identify customer vulnerabilities individually and at scale. Through analysing customer interactions and data, vertical AI can utilise NLP (Natural Language Processing) to spot customers who may be potentially vulnerable and allow your advisers to take the next necessary steps in ensuring they have the information they need to make appropriate choices moving forward. 


Vulnerability comes in a variety of flavours, from age to disability, low income, to limited financial literacy. There are transient and fixed levels of vulnerability, that can unexpectedly require support without the customer releasing they have additional needs. The implementation of vertical AI can allow financial institutions to proactively reach out and provide appropriate support, from the type of communications they create and send, to providing an accessible knowledge base for advisers to access to supply relevant information at the drop of a hat.


With multiple regulations in place, such as the FCA’s guidance on the Fair Treatment of Vulnerable Customers, and more to come, including an update to the FCA’s Fair Treatment of Vulnerable Customers this year, having vertical AI support your business will help you keep track of these markers. Trained to target specific FS vulnerability scores at individual and population levels, you will have greater means of spotting trends and developing a fuller understanding of how needs are changing over time. 


Performance & coaching

We are always growing in our roles. The ever-changing world demands it of us. Vertical AI in financial services helps to identify the areas that need focus and prepare targeted coaching for advisers to implement efficiently and effectively. 


From call recording and analysing, to collating feedback data, vertical AI can assess an adviser’s working practice and fine tune any weak spots with tailored support. Are your advisers checking off all of the necessary security measures? Are they listening to what their customers are saying? Do the customers understand what they are saying? Maintaining consistent, positive relationships is the key to building strong foundations in FS.


As we briefly mentioned above, vertical AI can create and maintain a unified, up-to-date knowledge base by learning from various sources including policies, regulations, best practices, training material and past interactions. Having this knowledge base will mean that advisers are never far from AI assistance when aiding their customers.


AI financial adviser assistant

A vertical AI financial adviser assistant can bring several powerful capabilities to financial services firms. By utilising a model that’s trained on FS data, you’re bringing in an automated support system that can provide highly contextualised and expert advice, analysis and recommendations tailored to each client’s specific situation.


Vertical AI


Continuously learning through the interactions your advisers have with their clients, your AI assistant can consistently update its knowledge by absorbing new data sources, market research, regulations and advisory best practices with the same understanding as your business.


But the biggest benefit to an AI assistant is the hours you and your team will gain for what’s most important: the customer. By handing off low-value, time consuming tasks to an automated system, you can focus on providing positive interactions, diving deeper into your customers’ circumstances, and gaining a better understanding of their needs and desires. And you get all this whilst maintaining a gold standard record keeping.


To sum it all up

Vertical AI is poised to revolutionise the financial services industry by enhancing efficiency, mitigating risks, and elevating customer experiences. By leveraging LLMs trained on industry-specific data, vertical AI can automate complex tasks such as document review, compliance monitoring, and vulnerability identification. 


The introduction of AI financial adviser assistants can further support the work of human advisers and QAs, offloading time-consuming tasks so that they can focus on building stronger relationships and stronger business practices.


As the financial services industry navigates the shifting landscape of regulations and customer demands, vertical AI presents a vital opportunity. By embracing these industry-specific technologies, financial firms can future-proof their operations, enhance customer satisfaction, and maintain a competitive edge in a rapidly changing market.


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