Digital transformation accelerating advancements in the banking and financial industry, technologies like Artificial Intelligence (AI), ChatBot, big data, automation helping banks to provide enhanced customer experience and customized solutions. With the start of the AI era, different industrial sectors are witnessing a vast change in operations and management. Needless to say, the banking and financial industry is also not behind.
Business Insider report says AI could be approx $450 billion opportunity for banks
No doubt, AI is the future of the banking and financial industry, AI is creating biggest tech revolution and brings many potential opportunities to accelerate advancements, to improve security, to provide enhanced customer experience, to provide customer-based solutions, to prevent fraud, etc. From banking to insurance services, AI’s impact is evident in all spheres. Below we have described how AI reshaping banking and financial Industry.
AI enabled chatbot, playing an essential role in delivering customized solutions based on customer’s requirements. No time bound, 24×7 availability to serve customers with certain queries. Based on customer’s recorded data (whether it is via mobile App, website login, customer support engagements, interaction with the chatbot) AI helps banking and financial organizations to understand the customer and serve them efficiently by offering a personalized solution.
Risk Management And Assessment
Artificial Intelligence has changed the concept of risk management and assessment. Now it is easier to drive data and scan through various records to help credit lenders find suitable loan applicants. AI has the ability to recommend a banking and financial institutions the right candidate for providing loan amount as per the credit history.
Both AI and Machine learning has paved the way for accurate reports. Both are taking the place of human abilities and the end result is accurate and error free. There is absolutely less possibility of mistakes as the data analyzing works following a certain pattern. Here comes the importance of the chatbots that has proved to be really fruitful tools for customer satisfaction and user-friendly experience. This, in turn, helps the financial industry save a lot of money and time. The work becomes swift and effortless.
AI As Financial Service Advisors
The use of robo-advisors is beginning to increase as they are not just efficient but also work unfailingly. Nowadays, financial organizations are more into implementing machine learning along with human abilities to work as a financial advisor. This actually helps the financial institutes to save money. With more decision-making AI in banking financial industry it can be expected that in the coming years there’s going to be a huge transformation of the financial business systems and operations.
Detecting Fraudulent Activities
Financial industry faces risks and managing those risks is the main mission so that the business can grow uninterruptedly. Yet reducing risks due to fraudulent activities is not easy. For instance, when a bank provides loan, it is actually someone’s money. You pay interest because you are actually borrowing someone else’s money from the bank. So it is clearly understandable why every financial institution take fraud in a very serious manner. But now, by integrating AI in banking, it is possible to identify fraud and secure financial transactions from getting into the wrong hands.
AI can figure out the odd behaviors of a particular individual depending on the type of transactions made along with the frequency and place of transactions. It does not just detect fraudulent activities, but also learns how to correctly detect further activities. If AI detects a regular transaction as fraud and if that is corrected by a human, the AI will remember the experience and will not repeat it again.
AI in Trading
Since the entire business of trading depends on predictions, more and more investment companies are relying upon innovative technical developments. If AI can predict the future pattern of trading market condition, it will create a drastic impact on the trading business. It is obvious that with machine learning things can be done in a more accurate manner with less effort.
If they are taught to identify and understand patterns of data and predict how they could be in the future, trading will be absolutely lucrative and interesting.
The best part is that AI can even study an individual’s criteria and suggest a suitable portfolio to help that person to meet the demand. So practically, AI can help people on buying and selling of stock.
One of the very recent developments of AI in banking is the ‘Personal Financial Management system’ in which AI is used to build algorithms. This in turn helps the consumers to understand and decide how to and where to spend their money. In other words, it is a smart way to manage finance and keeping track of all the spendings. It is an AI wallet that keeps all the data of a person’s finances and creates a graph. Although this system is yet to find its place worldwide as there are certain privacy concerns, but in future this could be the beginning of finance management.
Finally, it can be said that AI is a whole new world of opportunities and advantages, specially for banking and financial industry waiting to unfold.
[ Also Read: How AI is Powering the Transformation of the Retail Industry ]