Is Artificial Intelligence the future of Banking?
The recent buzz is about Artificial Intelligence creating impact and redefining the way banks do business. The competition and the digitized revolution in the financial sector are placing on banks the importance of using technology for a more effective customer service delivery. Advanced technologies such as AI-enabled chatbots and intelligent voice assistants like Apple Siri, Google Assistant, and Amazon Alexa have made personalized customer service possible, and are defining the way retail banks are commercializing on these new technologies to make banking easy and more customer-centric.
The digital disruption allows banks to deliver seamless experiences to their customers, and to meet these expectations, they have expanded from the traditional banking sphere to have technology-induced services like mobile banking, E-banking and real-time money transfers. While the rise of online insecurity threats the banking transactions, cyber-attacks, and online fraudulence, they harness cognitive intelligence using AL technologies like Predictive Analytics, Voice Recognition, advanced data analytics to combat fraudulent transactions and cyber threat and strengthen the banking experience of its tech-savvy customers.
Understanding Artificial Intelligence in the Finance Sector
Artificial Intelligence is a wide range of technologies including robotic process automation, natural language processing, advanced data and image analytics to help banks improve both their front office and back-office operations. Front-office AI Process includes chatbots, which have improved communication between the banks and their customers, with the use of advanced analytics to offer proactive advice to consumers. While the back-office implementations include algorithms that can identify, block fraudulent, and money laundering cases, and analyze the non-traditional data to assess the creditworthiness of borrowers who lack standard credit records.
Is Artificial Intelligence really the future?
The spread of cognitive intelligence and Al-based solutions is on the rise, and according to a research study, 27 out of 34 banks across the US, EU, Singapore, Africa, Australia, and India have implemented AI in their front-office functions in forms of chat boxes, virtual assistant and digital advisor. About $19.1 billion was spent on cognitive and Al systems in 2018, that’s a 54.2% increase over the amount spent in 2017. Then, a recent survey has estimated an increase in cognitive and AL software capabilities spending to grow to $52.2 billion in 2021. This confirms how AI-services are enabling financial institutions to solve critical problems and increase their workforce efficiency. Intelligent automation has replaced the manual tasks, improved customer experiences and outcomes in areas such as customer service, risk management, e.t.c.
In India, SBI, the leading bank has keyed into Artificial Intelligence by launching SIA, an AI-enabled virtual assistant whose specialization is assisting customers with day-to-day banking tasks. The SIA handles nearly 10,000 inquiries per second. While another leading bank, HDFC, has introduced ‘Eva’ (Electronic Virtual Assistant), which assists the bank with information about its products and services.
Then there is “EnlightBot,” an initiative by Udyamimitra to help online customers understand the process of acquiring a loan and utilizing other facilities of Udyamimiktra. It helps customers 24×7 and commits high standards and zero-errors. ‘Erica,’ also, a similar Al-service launched by the Bank of America recommends smart solutions to the bank’s customers.
However, these innovative AI-based banking services are not limited to only chatbots. Banks and financial institutions are also using software robotics to ease the backend process to achieve a better functional design. Just like COIN, software robotics –based service introduced by JP Morgan, a global financial service firm, which analyzes complex contracts saving almost 360,000 of man-hours and handles IT access request from employees.
The Benefits of a “Self-driven” and intelligence automated Banking
Human interaction is still imperative in handling some complex financial requests. Nevertheless, AI plays a vital role to improve the capabilities of the banking sector. An AL-integrated service provides financial institutions with unprecedented visibility into the customer’s dynamics and personalized customer service and speedy delivery. In a forecast by analysts at Gartner, it has been predicted that more than 85% of customer interactions will be managed without a human by 2020, and chatbots will have become the primary consumer AI applications over the next five years. There are so many benefits of Artificial Intelligence: helping banks derive valuable insight from the volume of data it manages, the algorithms accomplishing anti-laundering purposes. With features like AI bots, digital payment advisers and biometric fraud detection mechanisms enabling a higher quality of services to a wider customer base, AI seems to be a valuable craze. How machine learning, natural language processing, cognitive computing, artificial intelligence are driving beneficial automated banking:
- Personalized customer service automation: The use of natural language processing is driving effective customer service in the financial sector. These days, it is hard for customers to recognize voice bots over a human customer service representative. With these Al-based services, banks are able to resolve customer issues without human intervention. Alternatively, Al also offers personal finance management geared towards a quick resolution of a particular customer, and this does not only save time but drives efficiency and enhances the bank’s relationships with its customers.
- Data: Banks have access to a customer’s data, which include their detailed demographics, records of online, and offline transactions and much more. Hence, by utilizing machine learning the data can be integrated and the information analyzed to form a better view about the customer’s needs. AI captures the transactional and financial data to present them visually to customers. The actualization of this allows banks to personalize their services and products according to the behavior of each individual customer.
- Anti Fraudulent and Money Laundering: With the use of algorithms, AI can identify fraudulent activities. Artificial Intelligence is breaching the security gap of financial institutions as a growing number of banks utilize biometric data, like fingerprints, facial recognition, to replace the traditional passwords and other forms of verification. These new automated techniques are the more sophisticated and secure authentication being adopted by banks, and by 2021 will be increasingly become common and fade out the traditional means.
Finally, the Future of Artificial Intelligence
Is there a future for artificial intelligence in the banking sector? Yes, definitely, in fact, AI is still in its infancy but has already had an impact on the way retail banks do business, presenting it with myriad technological opportunities that solve critical problems. From chatbots, virtual assistants, personalized review summaries, software robotics are serving its purpose with sophisticated out-of-the-box solutions. Undoubtedly, AI will drive the banking and financial services market of the future. Not only will AI empower banks by automating its workforce, but an AI technology integrated into the bank’s operations and processes that leverages on human and machine capabilities will also drive low operational costs.
