Customer relations, data management, and processes: discover what’s behind the technological revolution in banking.
AIfred is 100 times faster than an executive. Pep is a mentor that enhances employee performance. Singular, on the other hand, is an executive that proactively serves clients. AIfred streamlines internal operations, Pep trains teams for better results, and Singular manages thousands of clients simultaneously, delivering personalized services.
Hearing these three names might make one think of highly efficient professionals in the job market. However, they are artificial intelligence (AI) solutions that act as virtual assistants, personal mentors, and virtual executives for clients. They promise to increase commercial productivity in the financial sector by up to nine times while reducing operational costs by 94%.
Created by the startup N5, these functionalities allow the management of a high volume of simultaneous interactions, providing automated service with empathy and attention to clients. Financial institutions using N5’s solutions include Santander, Zurich, Grupo Sura, Mastercard, and Farmers Insurance.
By democratizing access to high-quality financial services at a reduced cost, these innovations, according to the company, have the potential to transform the lives of millions of Brazilians, paving the way for a more inclusive future in the financial sector. Currently, around 107 million people (60% of the population) are underbanked, and approximately 4.5 million are unbanked, according to N5’s data.
For Argentine Julian Colombo, CEO and founder of N5, the introduction of AI profoundly transforms the organizational structure and the role of executives in financial institutions. With these tools, executives transition from predominantly operational roles to strategic supervisory positions over these intelligences. Instead of directly handling client interactions, they act as coordinators of AI, monitoring and optimizing the systems’ performance and effectiveness.
Founded in 1997 in the United States, the startup operates in 18 countries, including Brazil, Mexico, Chile, the United States, and Spain. In 2023, it received an investment round (amount undisclosed) with participants including Illuminate Financial, Exor Ventures, Madrone Capital Partners, LTS Investments, Arpex Capital, and Overboost.
As Colombo explains, leaders now focus on critical metrics such as the number of AI interactions with clients, the channels used, the cost per interaction, and the goals for each AI. Additionally, they analyze the quality of interactions, client satisfaction rates, and the need to retrain models to ensure accuracy and relevance.
“This new role requires strategic vision and analytical capabilities to identify and intervene only in critical points, maximizing efficiency and ensuring a high-value client experience,” says the executive.
How AI Is Used
According to Alexandre Muniz, IT and Operations Director at Generali, AI is being applied to various company processes, with a highlight on a project led by the legal claims team. The insurer also uses AI in areas such as information technology, human resources, and legal services to enhance daily performance.
“We are in a maturation phase of AI implementation. We have a tool in use that already brings efficiency and accuracy to daily operations. Additionally, we are conducting tests and pilots with other AI tools to expand their application across various company areas,” says Muniz. He expects AI to bring even more innovation and efficiency to Generali’s operations in the coming year.
José Roberto Kracochansky, CEO of Jazz Tech, agrees that AI in financial institutions has become essential, with applications in various points of client interaction. “Currently, the greatest benefits of using AI are in customer recognition processes to reduce fraud and enhance security in financial services, as well as credit evaluation processes,” explains Kracochansky.
However, he points out that working with traditional financial institutions poses challenges in adopting digital and AI solutions. Kracochansky suggests the market should be divided into regulated and unregulated institutions, as unregulated entities have more flexibility to test innovations.
Although the financial sector is a significant user of new technologies, innovation often faces longer cycles due to regulation. “The rise of fintechs accelerated this innovation process, as many solutions developed outside traditional banking environments only scale when adopted by traditional banks,” he says.
Sérgio Hirase, CPTO of Mycon, states that his company is using AI across various areas, including engineering, product development, HR, and marketing. They plan to soon apply these solutions to the end client, aiming for greater efficiency in sales, customer service, and collections.
According to Hirase, N5’s new AI solutions have great potential to transform financial services, offering personalized experiences that increase client satisfaction and loyalty while optimizing operations and freeing staff for higher-value tasks.
Poorly Applied Solutions
Although the landscape for AI startups is dynamic, Pedro Carvalho, a technology analyst at Empiricus Gestão, warns that many may face sustainability challenges, as with any venture capital investment.
Carvalho notes that cost reduction does not always rely on AI, and poorly implemented solutions can even increase expenses. However, he believes AI can enhance productivity, especially in labor-intensive areas like customer service and document processing.
The primary challenge in adopting AI in financial institutions, according to Carvalho, is integrating it with existing systems, which depends on the expertise of the teams managing these initiatives. Without this expertise, tools cannot fully meet expectations.
