Artificial intelligence (AI) is riding high at the moment, in no small part thanks to the booming popularity of generative AI tools such as ChatGPT and Midjourney. Unsurprisingly, that means that people in almost every industry and sector are wondering how AI will impact them. The foreign exchange space is no exception.
And, like so many other industries, AI could play a significant role in forex. It could, for example, transform the customer experience, by providing live, human-like, support whenever needed.
But as transformative as AI will undoubtedly be for the sector in the future, there are some things it needs to get right before that can happen. UX (User Experience) and Automation, in particular, should be a major focus in the coming years.
Breaking free from outmoded models
In our experience, most forex companies, but especially traditional banks, rely on outmoded models for facilitating foreign exchange transactions. And that’s not just true for one or two parts of the transaction but across the entire process.
Traditional client onboarding processes can, for example, be complex and tedious. In fact, one survey found that as many as three-quarters of business clients have simply given up onboarding for a new financial product because they found it too complex. While that applies to banking in general, it’s unlikely that something as tightly regulated as foreign exchange would be any better. Needless to say, traditional onboarding processes don’t exactly contribute to a positive customer experience.
Additionally, many banks use outdated platforms and apps, making it difficult to find what you’re looking for. That’s a problem when you consider a 2021 study which found that 33% of bank customers have quit using an app because of poor user experience. The same survey also found that 71% of customers favour simple and easy digital experiences to dealing with even the friendliest and most useful in-branch staff. In the forex space, any company that can provide the kinds of experiences that banks struggle with therefore has a strong chance of success.
The fintech space, for all its innovation, frequently has similar issues too. Some fintechs see as much as a 50% drop-off rate in the Know Your Customer (KYC) part of the onboarding process.
But it doesn’t have to be that way. Large parts of the onboarding process can be automated. That not only removes a lot of the legwork on the part of the prospective client but also results in increased efficiencies for the organisations. It’s something that we’ve worked on, using streamlined forms to gather information from clients, which can then fill in the much more complex banking and regulatory forms. Giving people easy-to-use platforms that are quick and reliable is fundamental and providing them means that, ultimately, everyone wins.
The same kind of logic could be applied to various other processes that come with forex transactions. By using the available technology to automate these processes, it’s possible that transactions can be made faster and cheaper, further benefiting both the customer and the organisation.
But that’s not the only place where automation can make a big difference in foreign exchange transactions. It could also be helpful in eliminating human error. Have you ever paid someone R100 000 when you should have paid R10 000? Alternatively, have you ever transferred a significant amount of money to the wrong account? Either of those scenarios is frustrating at the best of times, but it can be doubly so when it comes to international payments. And if they’re business payments, those errors can be a serious threat to revenues and profits.
Automation can help prevent that kind of human error by taking humans out of the process. That provides an added level of confidence to customers using forex services that have those automated guardrails in place, further enhancing the customer experience.
Another area where automation can make a big difference in forex is enabling seamless integration between different financial systems and platforms through APIs (Application Programming Interfaces). This integration reduces manual data transfers and further reduces the risk of errors introduced during manual data handling.
Automation lays the foundation for AI
Make no mistake, though, AI is coming for the forex space. Some providers are already using AI-enabled chatbots for customer service, for instance. And, as I’ve already mentioned, it could prove incredibly helpful for a variety of functions within the organisation.
But it’s the organisations that implement automation properly now that’ll be best placed to utilise those AI tools effectively down the line. There’s a good chance they’ll have a better idea of which ones are worth implementing too.
So, before you sign up with a forex provider that talks a big game when it comes to AI, do some digging and find out how far down the road it is with automation. Moreover, are its automation efforts built with customer experience in mind?
Great automation lays the groundwork for great AI, but in order for both to be effective, they have to have customer experience as their North Star.
