Artificial Intelligence Transforming Banking Sector
To transform the customer experience by enabling amicable, 24*7 customer interaction, the Banking sector is using Artificial Intelligence and witnessing innovative changes. AI is redefining the way the banking sector works and also adopting ways to create value in the world driven by the latest technologies.
What is Artificial Intelligence?
AI is a wide rangeability of digital computers to perform the task associated which typically requires human intelligence. Artificial Intelligence is a versatile science with multiple approaches. However, AI is powered by deep learning, technical consideration and the use of particular tools. Often, Artificial Intelligence revolves around the use of an algorithm. AI involves all those activities which involve a program executing in such a way, which we would normally think is dependent on the intelligence of a human.
Key Features of Artificial Intelligence
- Minimizes human error by applying certain methods of algorithms which results in reaching the accuracy and minimizing the error.
- Limitation of risks of humans by establishing the Artificial Intelligence robot which in return makes the thing easy for us.
- All-time availability i.e. 24*7 availability of machines through AI without any break. For instance, Helpline numbers are available 24*7 for handling the queries.
- Reducing the monotonous jobs of humans, by using Artificial Intelligence we can remove the monotonous jobs of humans and make them free for indulging in creative activities and work.
- Speedups the working process of verifying the information and data which is beneficial for both the customer and owner.
- Artificial Intelligence provides the assistance digitally to interact with the customers which ultimately saves them time and need for human resources. By using Digital Assistance in the business or work it can directly interact with the customer/user and can know what the user is looking for.
- Instant Decision making through Artificial Intelligence results in a faster way. As AI based machines work on the program-based system through which decision making can be done in a very faster way as compared to human decision making.
- Use of AI on the daily application for searching locations, phone calls and reverting to an email.
- Resolving complex human issues by innovation almost in every domain.
AI and Banking
Artificial Intelligence is used by the Banks in various channels to save costs and customer identification and authentication. AI is used by the banks majorly
- To detect and prevent fraud,
- To improve the process for Anti-money laundering,
- To maintain the regulatory checks and know your customer compliances.
- Improving the customer base and relationship,
- It provides distinctive recommendations.
Different Channels where AI is used by the Banks
There are different channels (Front office, Back office, and middle office) in the banks where Artificial Intelligence is used-
- Use of Artificial Intelligence in Front Office-In front office of banks AI is used to save the cost i.e. Conversational Banking. In front office and middle office Business Insider Intelligence (AI application) is used. In the front office, AI offers cost-saving opportunities as it reveals how to capture the opportunity at its best. Further, banks are also leveraging AI in the front office in-
- Maintaining Customer Relationship,
- Interaction of employees through chatbox and Voice Assistant messages,
- Personalized recommendation to the customers.
- Use of Artificial Intelligence in Middle Office-In middle office AI is used to detect and prevent payment fraud and to improve processes for Anti-Money Laundering and for knowing their customers. Further, AI is the best platform for the speedy escalation of subtle distinction and highly enlightened fraud attempts.
Artificial Intelligence is excelling at analyzing the frauds. Using AI-based technologies for preventing fraud attacks in very less time is the future of fraud management. AI is helping the banks to stay in compliance with the regulatory aspects and internal policies.
- Use of Artificial Intelligence in Back Office-Artificial Intelligence has fair and practical applications that are being used to transform the underwriting. AI in underwriting can update the summary instantly as new data becomes available for creating more accurate recommendations and to enhance the risk management insights. AI technologies are helping in improving the underwriting platform.
Also Read: How to use AI in Lending
Loopholes of Artificial Intelligence
AI also has some loopholes besides its brighter side mentioned above. Some of the loopholes are-
- The huge cost of creation and maintenance of hardware and software.
- Addiction to technologies and innovations are making humans lazy.
- The problem in the employment standards as AI is replacing the work of qualified individuals.
- No creative thinking as the machine performs the task for which they are being designed or programmed.
How banks are getting benefits through Artificial Intelligence?
Various banks are getting the benefits and are strengthening competitiveness through AI by-
- Increasing the customer base and also by enhancing their experiences.
- Forecasting of outcomes and profitable trends
- Apprehensive process and enables a variety of Information.
- Reduction in cost and assurance of quick processing
- Optimizing risk management and effective decision making
- Minimizing cyber risks.
For improving speed and security, more and more banks are using Artificial Intelligence. It also helps in risk management by monitoring transactions full time and can raise the warning when required. In the banking sector, AI works as a gatekeeper by keeping a check on the occurrence of unauthorized digital access or fraud. To reap the maximum benefits, the management of the Banking sector uses AI as a front gate mechanism to gather customer information, facilitates pattern recognition, collect and analyze data. Additionally AI runs in the background to keep an eye on suspicious transactions, while still allowing human representatives to intervene where needed and allowing them to focus more on inter-personal services.
Also Read: Impact of AI on Financial Service Landscape