We’ve heard a lot about Generative AI (GenAI), with the releases of new Large Language Models (LLMs) constantly making headlines and filling our inboxes. But how does GenAI work in practice, and how can businesses leverage this technology to stay ahead rather than risk disruption? Let’s delve into the transformative potential of GenAI in financial services, examining its distinctiveness from traditional AI, a use case in client communication, and the significant benefits it offers.

Traditional AI vs Generative AI

Generative AI (GenAI) comprises AI models and algorithms that generate new, original content—such as text, images, code, audio, or video—based on natural language prompts. Unlike traditional AI, which identifies patterns and makes decisions from existing data, GenAI creates novel outputs by understanding complex contexts. This represents a major leap in AI capabilities, enabling diverse applications.

For example, traditional AI can suggest music based on previous listening habits, but GenAI can compose new music pieces or lyrics that resonate with a user's emotional tone and preferences, showcasing its creative and adaptive capabilities. Understanding these differences highlights how GenAI can innovate and give businesses a competitive edge in the financial services sector.

(Explained very well by Bernard Marr )

GenAI for modernising customer communication

With GenAI foundation models like Gemini and GPT, building AI applications from scratch is no longer necessary. These models leverage their understanding of human language and computer programming to provide a solid foundation for AI-driven solutions. However, they aren't quite ready for direct business use. If you've ever used ChatGPT or Gemini, you might have noticed they sometimes get things wrong, don't fully understand you, or invent wrong answers, highlighting a gap between the potential of Large Language Models (LLMs) and their reliable use in business.

Koodoo’s Call Checker tool is a great example of bridging this gap in financial services. It incorporates advanced technologies such as automatic speech recognition and enhances GenAI capabilities through smart prompt engineering. Supported by robust and user-friendly software design, it is tailored to its specific use case and consistently delivers high-quality, reliable results, making it an exemplary tool for enhancing client communications.

Find out more about Koodoo Evaluate

Utilising GenAI to tackle challenges in the Financial Services industry

🕵️Minimise Negative Consumer Impact: Traditional compliance systems often delay in detecting issues, sometimes not until days or weeks later. For instance, a customer may only learn about a mistake in their mortgage application after it's too late for corrections. This not only wastes resources but also harms the customer experience. Near real-time AI monitoring can identify and help rectify issues in a timely manner, reducing the negative impact significantly.

💯Review All Cases Comprehensively: Most firms currently review only about 15% of consumer interactions, severely limiting visibility into customer outcomes. AI can provide 100% coverage, analysing every interaction comprehensively and ensuring that no compliance issue is overlooked, thus enhancing the effectiveness of monitoring. What does this mean? Clients, business partners, and regulators all have better confidence in the outcome of your firm’s operations, enhancing trust and certainty across the value chain.

😄Improve Staff Satisfaction: Advisors don’t like being called by the compliance team weeks after a case to be told they missed something crucial. This inefficient process is not just a bottleneck for compliance and business outcomes but also creates a frustrating workflow for staff. By integrating GenAI applications with user-friendly designs and automatic AI reporting, advisors are able to immediately understand and rectify issues with clear evidence, improving job satisfaction and reducing internal conflicts by fostering a more responsive and transparent environment.

Enabling Deeper Insights and Innovative Opportunities

Not only could GenAI satisfy current efficiency gaps, the technology also enables further possibilities in business and allows innovative firms to take a step further in their process optimisation journeys.

📈Enabling a deeper dive into data

This system not only facilitates rapid feedback but also enables the monitoring of real-time performance and provides access to a comprehensive repository of call data. The deep analysis of this data through AI-driven analytics is particularly powerful. These analytics can discern patterns and trends from the aggregated call data, enabling firms to tailor their services and marketing strategies more effectively.

For instance, if AI detects that the term 'cost of living' has been mentioned increasingly over the past 30 days, this could indicate growing financial concerns and risk-averse attitudes among customers. Such data-driven insights support not only compliance but also strategic business decisions, thereby enhancing overall customer engagement and operational efficiency

🥳Make humans happier

The AI-driven compliance monitoring system streamlines processes across the organisation, improving workplace satisfaction. It allows managers to minimise risks and handle issues quickly, while customer-facing staff benefit from timely feedback, reducing conflicts and focusing on enhancing customer relationships. With 100% monitoring coverage, all customer interactions are thoroughly checked, improving service quality and customer satisfaction, and creating a happier, more productive work environment.

Sabrina Nainu, Compliance Manager at Koodoo Advice, highlights the efficiency and transparency brought by the system: "With Koodoo’s Call Checker tool, we can rely on the highly accurate dashboard as our source of truth for compliance checks, saving us significant time compared to pulling information from multiple audio files and records, especially when providing feedback to advisors on their call and file performance. It allows for enhanced oversight, transparency, and comprehensiveness, enabling a more seamless Quality Assurance experience. Compliance, Operations, and Senior Management  can use this tool to aid in training and supporting advisors within the business."

💪Build your competitive Edge

Following the recent AI update from the FCA, leveraging AI to enhance customer outcomes is essential. Validating 100% of customer calls and maintaining detailed records ensures compliance with FCA regulations, building trust and confidence among clients and partners. GenAI enables comprehensive monitoring, promptly identifying and resolving issues, which improves customer satisfaction and loyalty. This proactive approach not only meets regulatory standards but also sets your firm apart in the market.

Integrating GenAI boosts business performance through data-driven decision-making, reducing uncertainty and enabling swift strategic adjustments. It positions your firm as a technological leader, attracting clients and partners while establishing a robust digital database for future innovations. By enhancing service quality and ensuring regulatory compliance, your firm gains a significant competitive advantage and remains at the forefront of industry advancements.

(Our vision of the future of advisory compliance in financial services)

The Way Forward

Generative AI (GenAI) represents a transformative leap in artificial intelligence, offering businesses powerful tools to tackle industry-specific challenges. In the financial services sector, GenAI can transform compliance processes, improve staff satisfaction, and provide comprehensive insights into client interactions, all while fostering greater trust and reliability.

As we move forward, the integration of GenAI will be a key differentiator for businesses seeking to deliver superior customer outcomes and maintain a competitive edge. Now is the time to explore the full potential of Generative AI, ensuring your business remains at the cutting edge of innovation and excellence.

✅ Follow Koodoo on LinkedIn today for GenAI insights and real-world applications in financial services.