Artificial Intelligence (AI) is taking businesses to the next level mainly because of the services offered under this technology. Every industry has started seeing improvements in their business processes, costs and work efficiencies due to the introduction of AI in their field. For every industry, AI brings something different to the table. AI has helped decision makers to make quick accurate decisions which are backed by facts and helps implement suitable options.
When we talk about the financial sector, the insurance industry has already implemented AI in their field. Today, 54% of insurance companies have started using AI for their processes but only 34% of banking and finance institutions have adopted AI. As AI is in full swing, leaders need to closely understand where and how they can implement AI in their field and how they can reap maximum benefits.
The financial services sector is a potential area where AI has a lot to offer as it is an exciting time for the banking sector. There are huge amounts of data being generated in the Banking and Finance Industry (BFSI) and there are a lot of insights in those huge amounts of data which need to be analyzed. AI can easily examine the data fed to it and provide outcomes which can be used to create more opportunities and understand the current scenarios.
According to Accenture’s recent Accenture Banking Technology Vision 2018 report, 83% of Indian bankers believe that AI will work alongside humans in the next two years — a higher than the global average of 79%
Banks now offer services through digital means which has resulted in an increase of online transactions, growth in customers who are increasingly benefitting from digital initiatives of banks. Customer experience is one such area which can be enhanced through AI as quick support can be easily provided to the customer and he can even be offered tailored banking products according to his requirements.
Below are some of the areas in the banking sector which are going to transform themselves because of the introduction of AI:
1. Real-Time Fraud Detection
The financial sector has been at the receiving end of numerous frauds and according to a report released recently by McAfee, frauds in the financial sector all over the world has resulted in a global economic loss of about $600bn. But as the technology landscape changes, banks are rapidly transforming and adapting new ways to counter threats and frauds. Big Data also plays an important role in providing banks with deep insights into a customer’s data and behavior patterns. When we talk about mitigation of financial risk, new solutions which are AI enabled and new advanced financial models will help banks identify fund flow analytics in real time and discover fraudulent transactions which can be stopped the moment they are discovered.
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2. Chatbots for customer service
Like any other business, it is important for banks too to acquire new customers and provide them with services they need along with excellent customer support. People no longer visit banks to obtain minor information like interest rates, loans or services a bank has to offer. All the customer needs to do is visit the bank’s website and find out all the information they are looking for in no time at all.
Chatbots have been proved effective by certain banks who are currently making use of this technology stating that installation of chatbots has resulted in utmost customer satisfaction. People find it tedious to call or email a bank in case of a query but they find it very convenient to reply to a ‘Hello’ by a chatbot on the bank’s website. Efficient, systematic and accurate conversation leads to great customer service.
3. Improved banking products
AI can analyze various types of data and through that it is able to obtain great insights into the customer’s behavior and preferences. By understanding customer’s requirements, AI will be able to serve them better with the best possible banking services. Historical data plays an integral role in unearthing customer’s buying patterns which are necessary for providing expected banking products and services.
4. Improved security
Whenever we adopt new technology, there are always new challenges that we face and thus, in this case, it is important to ensure that banks remain in compliance with industry regulations and protect customer’s private data from losses, frauds and security breaches. The new technology will pair blockchain and AI-powered algorithms which will offer multiple layers of modern and robust security which will reduce the risk of tampering with transactions which results in losses.