Enhancing Digital Product Experience (DPX) in Fintech with AI

AI has quickly become one of the most recognized technological trends in the fintech industry to improve digital product interaction.

In 2021, the Global AI FinTech market was valued at $8.23 billion which, by 2031, is projected to grow to $61.30 billion, growing at a CAGR of 22.5%. A survey by Moody found that 18% of FinTechs are currently using AI; it is double of what other sectors reported.

AI plays a crucial function for fintech because of the tailored user experiences it provides, the process efficiency it achieves, and the protection it provides. The crucial requirement for fintech organizations is to comprehend the digital product experience for properly using Artificial intelligence (AI).

DPX is a definition of how a user perceives a specific digital product, its usability, functionality, and even the degree of satisfaction. In the context of the fintech industry, DPX is critical because it directly relates to the ability to retain and engage the customer. A smooth DPX means that users will continue to use the product as they can easily understand its functionality and how useful it is.

Components of DPX include:

Recent developments in DPX within the fintech sector emphasize innovation, emphasizing things like personalization, automation, and improved security. When these aspects are analyzed and further enhanced, fintech organizations can ensure the best possible experience that is suitable to the market demands.

Let’s understand how AI can help in improving digital product experience in FinTech:

AI can be used in the context of monitoring users’ behavior and then offering related financial tips. AI can also assist users with financial management, and give recommendations of where to get loans, where to invest, and where to save money based on the user’s financial needs, goals, habits, preferences, and motives.

Personalization has emerged as the dominant trend for UX and with good reason, with personalized e-mails generating on average 26% more opens. Such a level of personalization makes customers feel that the company is interested in their problems and focuses more on them.

Chatbots and virtual assistants powered by AI are effective in customer service provision since they offer round-the-clock services as well as instantaneous answers to inquiries.

These AI assistants can help the user in multiple ways, they can help the user to complete a complex process, answer frequently posed questions instantly and they can also save a lot of money on customer service. The users are in contact with chatbots almost all the time and get faster responses which improves on customer support experience.

The use of AI improves security in fintech since it analyzes the transactions and identifies the malicious ones. Banks and other financial institutions are 300 times more likely to become a target of cyber criminals than any enterprise. In this case, AI monitors the financial flow and analyzes users’ activities and patterns, providing notifications on anomalies immediately. This assists fintech businesses update their security features, gain client confidence, and offer a non-stressful encounter.

The use of AI also enhances the authentication of individuals through voice and facial recognition systems. These biometric methods provide for easy experience by enabling the users to get into the fintech app with ease and without any complications. It should also be noted that this technology can be combined with other means of authentication, thus creating additional levels of security for data and privacy.

AI is used to manage repetitive tasks that involve a lot of paperwork, for instance, it can be applied to know your client (KYC), loan forms, and account opening forms, among others. This has saved much time and effort besides minimizing human error which is quite common, especially in large organizations during the onboarding process. Modern image recognition technologies used in AI algorithms enable users to take photos of their IDs and faces and upload them, saving time on KYC, and eliminating the need for constant supervision.

While implementing AI to improve digital product experience seems lucrative for FinTech, there are challenges on the way. Let’s explore them.

AI provides many opportunities, but it must uphold ethical norms and be clear. Fintech companies have a responsibility to ensure that AI systems are used responsibly, especially in the collection and analysis of data. Individuals should be made aware of the data being collected and the reasons behind the same. It also means that AI decision-making processes should be transparent in order to minimize potential ethical issues.

It is not always easy to implement AI solutions into existing fintech technology architectures. Potential challenges for fintech include compatibility problems, data isolation, and high capital expenditures. To overcome these challenges, fintech companies should:

Preserving the confidentiality and integrity of customer data is crucial when deploying AI. FinTech companies are subject to laws such as GDPR and CCPA which require them to protect clients’ information. The utilization of strong encryption measures and proper storage of users’ information can prevent data leakage and ensure compliance with regulations.

AI systems need constant supervision and updating to continue providing optimum results. The constant update of AI algorithms and models guarantees they remain useful and provide timely information. It is also important for FinTech companies to collect user feedback that will enable the organization to understand areas that require changes for better provision of the digital product.

Artificial intelligence’s role in fintech is set to grow steadily in the future, with the additional advancements in technologies that will improve usage. Fintech companies should make sure that the user experience is smooth, personal, and optimized, the overall risk is minimized, and the security of customer information is protected.

If you’re a FinTech product owner looking to find opportunities for AI implementation in fintech, you should start with an AI assessment. We, at Techtic, can help you assess your AI readiness and identify the right area to begin AI adoption. Feel free to reach out to our AI experts to explore the possibilities.