Artificial Intelligence (AI) is riding high at the moment, in no small part. Given 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.
Like so many other industries, AI could play a significant role in Forex. For example, AI could potentially transform the customer experience, by providing live, human-like, support whenever needed.
However, as transformative as AI will be for Forex 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.
Complexity of Onboarding New Financial Product
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 this 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.
Binning Outdated Platforms and Apps
Furthermore, several banks make use of outdated platforms and apps, making the search process complicated. Considering a study from 2021, 33% of bank customers have stopped using an app because a poor user experience.
The same survey also found that 71% of customers favor 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 have a strong chance of success.
The Fintech sector faces a similar challenge and sees as much as 50% drop-off rate in the Know Your Customer (KYC) part of the onboarding process.
Automating The Onboarding Process
The onboarding process can be automated. Going through this process will eliminate the legwork for the prospective client and at the same time increase efficacy for organisations. Making use of streamlined forms to gather information from clients. This same logic can be applied to Forex transactions.
By using the available technology to automate these processes, its possible that transactions can be made faster and cheaper, further benefiting both the customer and organisation.
AI can also eliminate human error and enable 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.
Before signing up with a forex provider it is highly recommended to do some research as to how far along the company is with the integration of AI into its processes.
By Josh Kotlowitz, Chief Technical Officer, Future Forex