AI and Ecosystems in Financial Services

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1 AI and Ecosystems in Services

2 HOWARD BUSH Principal, Banking and Capital Markets Cloud & Enterprise Azure Engineering A Banker in IT Clothing 6+ Microsoft 25 year banker (IT, HR, Sales, Ops), Bank of America, National City Bank, First Union, KeyCorp, Ameritrust, Edward Jones, Bankers Trust, etc. Previously at Microsoft Worldwide Services Industry Solutions Microsoft Consulting Services Delivery Manager Managing Architect Enterprise strategy Enterprise Architect

3 Agenda AI context and opportunity for Services Exploring Deeply Customized Customer Experiences Microsoft Platform Serving up Agility and Infinite Scenarios

4 AI Context and Opportunity for Services

5 How will Traditional Banks Innovate and Evolve? Micro Personalization of Experiences Branch of the Future (Virtual Presence, Augmented Reality, Seamless life integration) Advisory Payments Cards Deposits and lending Non-Traditional Services Social Networks Augmented intelligence (bots/agents, robo-advisors, intelligent automation) Fintech partnerships Digital ledgers and blockchain Predictive analytics, IoT, big data

6 Intelligent automation Predictive decisions Natural interaction BOTs API economy Intelligent Bank Predicting what s next for the customer seamlessly Social CRM Cloud Personal finance management Modern branches and ATMs Real-time marketing Robo-advisory Immersive Bank Providing frictionless consistent customer experiences Mobility Analytics ecommerce The ultimate goal is the provision of a single experience for customers through one interface a seamless end-to-end journey to the desired customer outcome. Traditional Bank Bank provides multiple channels for trusted interactions with clients Credits Payments Loans Deposits

7 Artificial Intelligence Pursuing computing advances to create intelligent machines that complement human reasoning to augment and enrich our experience and competencies What was true then and what is true now, is that we create technology so that others can create more technology. Satya Nadella

8 The retail and banking industries were forecasted to spend the most on cognitive and AI systems in 2017 with investments of $1.74 billion and $1.72 billion, respectively. By 2018, half of all consumers will interact with cognitive computing on a regular basis Cognitive systems and AI will drive revenues from $8B in 2016 to $47B in 2020 Source: IDC Worldwide Cognitive Systems and AI Systems Spending Guide, Oct 2016

9 The financial services revolution? 91% of banks and 75% of FinTechs say that collaboration will become an expected way of business and they expect to partner with each other in the future. World Retail Banking Report 2017 Capgemini & Efma Our costs are too high and our agility is too low if we don t change this quickly, we won t be able to compete. CIO of a Global Systemically Important Institution

10 The current vision misses business transformation services companies are focused on using technologies to improve efficiency but missing the opportunities to transform their businesses. Insurers have a traditional product delivery model while banks are trying to leverage fintech companies to deliver more compelling customer experiences. Current State of Customer Experience Delivery Insurer Bank Fintech Customers Delivering a one-size-fits-most experience to customers Customers

11 Trusted Networks (Examples) Brands Customer experiences are aligned by function and brand today Experience providers are narrowing their focus to smaller niches with greater capabilities. The creation of customer experiences is accelerating. Generalized experiences are likely to be outflanked by more targeted experiences. Most Institutions Most Retail Brands Some Taxi Brands and Cities Most Lodging Brands A Growing Number Services Retail Transportation Delivery Lodging Government Others

12 Niches Deep Customer Experiences The digital future is characterized by deeply customized user experiences targeted to customer niches and specific activities. Aligned by user type and activity Activities Plan an Event Manage a Small Business Walking Personal Dressing Gift Buying Scuba Diving Young Professional Classy Party Getting to Work Right Smart Winning Retirement Mobile Valet The Genius Gift Giver The Divers Bucket List Retired Environmentalist Track Nature s Progress Leaving a Legacy Practical Dress Nature Giving Diving for Good Working Mom with Small Kids Birthday Easy Smart Money with Kids What to wear Little Gifts for Special People Diving with Kids Bakery Owner Building a Better Bakery High school student Plan your Prom Club Fund Raising Walk to School College What s in and What s not Giving Gifts With Little Money Lost a loved one to death Funeral Estate Gifts for Family Loss

13 Niches Functional Integration Powerful Stories Each functionally aligned capability will combine to enhance customer experiences Activities Plan an Event Manage a Small Business Walking Personal Dressing Gift Buying Scuba Diving Young Professional Classy Party Getting to Work Right Smart Winning Retirement Mobile Valet The Genius Gift Giver The Divers Bucket List Retired Environmentalist Track Nature s Progress Leaving a Legacy Practical Dress Nature Giving Diving for Good Working Mom with Small Kids Birthday Easy Smart Money with Kids What to wear Little Gifts for Special People Diving with Kids Bakery Owner Building a Better Bakery High school student Lost a loved one to death Plan your Prom Funeral Club Fund Raising Walk to School College Estate What s It and What s not Giving Gifts With Little Money Gifts for Family Loss Services Retail Others Government Lodging Delivery Transportation

14 Niches Examining one customer experience shows the possibilities Building a Better Bakery customer experience provides clarity on what is possible. Activities Plan an Event Manage a Small Business Walking Personal Dressing Gift Buying Scuba Diving Young Professional Classy Party Getting to Work Right Smart Winning Retirement Mobile Valet The Genius Gift Giver The Divers Bucket List Retired Environmentalist Track Nature s Progress Leaving a Legacy Practical Dress Nature Giving Diving for Good Working Mom with Small Kids Birthday Easy Smart Money with Kids What to wear Little Gifts for Special People Diving with Kids Bakery Owner Building a Better Bakery High school student Lost a loved one to death Plan your Prom Funeral Club Fund Raising Walk to School College Estate What s It and What s not Giving Gifts With Little Money Gifts for Family Loss Services Retail Others Government Lodging Delivery Transportation

15 Customer experiences on the cloud Microsoft Platform Capabilities Weather Big Data Community Calendar Functionally Aligned Capabilities Traffic Bus Schedules Cars Social Media Others Payments Lodging Insurance Others Investments Purchasing Budgeting Government Services Other Customer Experiences Transportation Delivery Shopping Provides access to a myriad of services 16

16 Building a Better Bakery Capabilities Microsoft delivers agility to assemble customer experiences AI Average income of people nearby What to bake for which days Optimize price for products Business expansion options Deliver service options Optimize staffing Optimize which staff when Create staffing schedules IoT Equipment monitoring Current ingredient supply Bot Answer questions for customers Make recommendations to customers Blockchain Create a secure employee onboarding ML Alert on customer patterns Note changing business How customers behave in the store Investments Request new capital Savings progress Recommendations for investments Budgeting Progress toward business growth goals Variance of spending from budgets Insurance Insure equipment s changing value Insure assets Business continuation Key person insurance Government Services Real Time tax submittal 911 support Purchasing Reorder regular supplies Delivery of orders Shopping Cars Find best deals, source, and location of supplies Suggest new products Parking availability Types of cars Social Media Ratings, comments, recommendations Changes in opinions Look for new employees Community Calendar Receive alerts on local events Anticipate changes in sales

17 Thank You! If you want to continue the dialogue with Howard Bush