The financial services sector is lagging in customer engagement, despite being a leader in modernizing across more complex functions, like trading and managing transactions. What gives?

The handbook Customer Service for Dummies says to “design customer-centric processes and technologies” that “focus on the customer’s convenience rather than on your own.” Attempts to achieve this standard are evident in user-friendly mobile apps and social media, but these changes alone have not been enough to provide either the immediacy or the trust that customers are seeking when it comes to their finances.

However, things are looking up. In the past 18 months, AI-powered chatbots have presented a way engagement can be transformed, enabling organizations to automate repetitive tasks, queries, and transactions to create a more efficient user experience.

A human touchpoint — the cornerstone of customer engagement for the financial services industry — could be disrupted for the first time in many decades by this new technology that promises the magic formula of reducing friction for access, improving engagement, and increasing the value of human interactions.

Forward-thinking organizations, across financial services and beyond, are already beginning to use AI to automate tedious processes, delivering efficiency while opening new revenue opportunities. Rapid advances in machine learning, natural language processing, and real-time computing have enabled users to interact with computers in the same way they would interact with a person, powered largely by chatbots. A recent Accenture survey across 33,000 consumers in 18 countries indicated that more than 70 percent would be willing to receive computer (read: AI) generated advice from a financial services entity.

Organizations that are already embracing cognitive computing technologies to support both their customers and internal employees are seeing early feedback that indicates material change. Let’s examine the magic formula and what it means.

1. Reducing friction for access

In the words of a chief digital officer at a UK bank, “Chatbots set you free.” In simplest terms, this is why AI chatbots are shaking up the traditional banking model.

Chatbots do not require an app download that eats up marketing promotion dollars. They can be deployed once on all digital properties — the website, portal, mobile app, or Facebook Messenger — streamlining access for customers and making communication more efficient. Advanced AI chatbots with emotional intelligence can deliver spend analysis and stock advice, assist in opening or closing an account, transfer money, or resolve a credit charge dispute, all while handling exasperation and irritation with sincere, humanlike empathy.

In today’s digital era, with everyone accustomed to having information at their fingertips, on-demand access is paramount for people to make informed financial decisions on their own — and chatbots are on-demand.

2. Improving engagement

AI interfaces don’t get sick or take vacation time, and they always present the facts. Specifically, in the insurance industry, AI-based chatbots to assist new customers are being rated more favorably than live agents because they’re objective and answer questions accurately. Most importantly, they do not “sell.”

Deloitte predicts that 57 percent of millennials would give up their current bank relationship for a better technology alternative. The proof is in the numbers — AI-led user transactions are taking hold in the financial services industry, and there’s no turning back from this level of engagement. Why would you?

3. Increasing the value of human-based interactions

The current scaremongering about automation eliminating jobs is largely overblown.

It’s true that the answering of millions of inquiries, like address changes and billing questions, that flood customer service agents everyday can be automated. However, this is not a bad thing. Automation frees up the live agent to focus on high-value tasks that cement customer loyalty, including handling identity theft or managing a deceased relative’s account closure, which by law requires human interaction, as well as a tender hand. It focuses human-based interaction on the truly value-added actions that burnish the brand on an individual level, making employees stronger experts in their field.

There is no doubt that modernization in sectors with complex regulatory roadblocks and intricate systems is a difficult feat. Another layer of challenge, especially for financial service institutions, lies in choosing tools that not only integrate with existing legacy systems that are already in place, but ensure compliance with evolving industry guidelines.

In just a few years, customers will manage 85 percent of their relationship with a business without human interaction, so transformation has officially reached its tipping point. AI must be deployed here and now to start the journey — to facilitate simple tasks, like opening an account or finding information on a banking website, not to wipe out all human employment.

Ram Menon is the founder and CEO of Avaamo, an enterprise chatbot platform.