Benefits & applications of AI in banking

Tram Ho

In the world of technology, Artificial intelligence or AI is the rising star. Artificial Intelligence is the go-to technology for almost all organizations around the globe. Now, if Artificial Intelligence is the trending subject on media and people around the globe are talking about it, then there must be something vital that we need to know and understand.

As the name suggests, Artificial Intelligence is the process of copying from something natural, in terms of acquiring and applying knowledge and expertise. So, when a machine understands a human mind by thinking for itself, it is known as Artificial Intelligence.

Artificial Intelligence powered banking

Harnessing perceptional technology with Artificial Intelligence (AI) brings some benefits of digitization to banks and helps them meet the customers’ requirements. In fact, about 32% of financial service providers are already utilizing AI technologies like Voice Recognition, Predictive Analytics, etc.

The banking sector is an area which is welcoming Artificial Intelligence with open hands. AI in banking is a joint procedure powered by chatbots and other automation technology, and for giving fuel to these techniques, machine learning and deep learning plays an important role.

According to the report “Accenture Banking Technology Vision – 2018”, 83 % of bankers of India believe entirely that Artificial Intelligence will be their companion in work in the coming years.

AI is the future of banking as it brings the features of advanced data analytics to encounter fraudulent transactions and improve adherence. AI algorithm accomplishes anti-money laundering cases in a few seconds, which otherwise takes very much time.

AI also enables banks to manage vast volumes of data at record speed to get valuable information from it. Features such as AI bots, biometric fraud detection mechanisms, and digital payment advisers lead to an exceptional quality of services to a broader customer base. All this translates to outstanding revenue, reduced costs, and a boost in profits.

Strengthening the competitiveness of banks

Enhanced customer experience

Based on past interactions, AI builds a great understanding of customers and their behavior. This helps banks to customize financial products and services by including personalized characteristics and intuitive interactions to provide meaningful client engagement and build strong relationships with their customers.

Cognitive process automation

This feature enables the automation of different kinds of information-intensive, costly, and error-prone banking services like claims management. This secures ROI, decrease prices, and ensures accurate and fast processing of services at each movement. This process fundamentally automates a group of tasks that improvises upon their previous iterations through continuous machine learning.

Effective decision making

Cognitive systems that think and act like human beings, provide practical solutions based on the available data in real-time. These systems keep a record of expert information in its database called the knowledge database. Bankers use these cognitive systems to perform effective decision making.

Realistic interactive interfaces

Chatbots identify the context and emotions in the text chat and respond to it most suitably. These cognitive machines not only improve work efficiency but also help banks to save dollars as a result of cumulative cost savings.

Robotic automation of processes

AI transforms processes by applying Robotic Process Automation (RPA). This enables automation of about 80% of repetitive work processes, allowing knowledge employees to dedicate their time to value-add operations that require a great level of human intervention.

Applications of AI in banking

For Artificial Intelligence, the banking sector is the most significant opportunity. Some of the important applications are:-

Business process management at the backend

  • Human resource related services

Artificial Intelligence can be used for handling main tasks related to hiring, such as engaging with recruits, initial stage filtering, pre-screening applicants over chat risk Analysis.

  • R&D of investment realted services

There are various repetitive back-end tasks. Using software robots for managing such tasks can be the right choice, which can not only save time, but this idea can provide excellent work efficiency and accuracy.

  • Algorithmic trading

AI provides so many algorithmic solutions that are used for handling high-frequency trading where data is fetched from various financial markets and based on this data, several investment decisions are made in milliseconds.

  • Robotic process automation

Cognitive computing is the future of Robotic Process Automation.

  • Insurance under-writing

AI also provides great handling for Insurance-related tasks such as predicting the premium to be paid by a customer and risk assessment accuracy measures.

Privacy, Security & Compliance

  • Scam & fraud detection and their prevention

Using machine learning, a subset of AI, scam, and fraud detection is very much easy now, unlike the measures used in the past.

  • Compliance monitoring

The use of AI reduces the time taken to check the lengthy records and marking the potential problems, and now it is possible in a few seconds as compared to hours previously.

CRM, Marketing & Customer Support

  • Chatbots or voice bots app development services

Chatbots and voice bots are very popular now, and a more enhanced version of chatbots is coming now known as Co-bots. Chatbot app development with AI powers makes your bot capable and intelligent to answer difficult questions or queries. The interaction is exceptional, conversational, and lively.

  • Personalized financial services

Bots with great Intelligence are also used for managing customer goals, such as recommending stocks or bonds.

  • Smart wallet app development services

E-wallets with fast and intelligence capability such as using the biometric system for security purposes, which made easy as well as secure. As a smart wallet application development company, RavStack provides end-to-end smart wallet app development services to cater to custom business requirements.

  • Robotic process for handling financial products

Financial Products can be handled using robotic processes.

Best practices for enabling AI in banking

  • Understand a particular issue by identifying the requirements

It is essential to know the requirements of the market. First, Artificial intelligence can provide different solutions for the same issue, but it is also necessary to see the disease before prescribing any medicine.

  • Build a management strategy for handling data

Learning is the most crucial aspect of any AI technology. AI requires a lot of learning to deliver a great outcome; it is not a software program that will serve extraordinary results as soon as it is deployed. It requires some historical data to train itself. The process can be time-consuming.

  • Automating the testing continuously

Having correct outcomes in the development phase by AI does not ensure that it will give you the best results in production also. It can provide unpredictable effects on the actual data. That is why it is important to set up a mechanism of constant testing for an AI.

  • Maintain the efficient mathematical spirits of the solution

The results provided by an AI should be mathematically accurate and practically right.

AI-driven future

Artificial Intelligence will not only empower the banking sector by automating its knowledge workforce, but it will also improve the intelligence of the automation process enough to do away with cyber risks and competition from FinTech players.

AI will enable banks to leverage human and machine capabilities expertly to drive work and cost efficiencies, and deliver personalized services. All of these benefits are no longer a futuristic approach to accomplish for banks.

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Source : Viblo