10 Ways Artificial Intelligence Is Transforming Banking Operations

Updated On : December 2019

Artificial Intelligence is rapidly transforming the financial industry more than any other technology in recent history and is becoming a major disruptor. Banks are aiming to minimize costs, meet margins, and exceed customer expectations through personal experience. With AI being woven into their business strategy, banks and financial institutions are being empowered to completely redefine the way they operate.

An important aspect of AI in banking is to get an insight into customer preferences and ensure they are happy. AI technology has redefined the customer experience by providing instant interactive solutions.

Here are some of the ways the banking industry is shaping the world of banking with Artificial Intelligence.

  • Fraud and Risk Management

    Online fraud and scams have always been an area of great concern in banking and challenging for banks to take care of. AI identifies fraud factors and supports investigation teams and enhances security with its fraud prevention tactics.

  • Biometric Identification

    Today biometric technologies are used increasingly at data centers to support face recognition and speech detection too. In the banking or financial services sector, retinal scans and other biometric technologies are being used for security and access purposes. These technologies enhance security measures and authenticate access to internal clients. Clients today can also easily access their banks through apps on their smartphones so going through a strict security route is crucial.

  • Client Personalization & Enhanced Customer Experience

    The banking industry is focused on providing exceptional customer experience and AI enables personalized communications with clients through complete online support and management. AI understands customers and their behaviour better and enables banks to customize products and services by adding personalized features to deliver meaningful customer engagement. Customers can also access their bank accounts on their phones and carry out all transactions.

  • Chatbots

    Chatbots and virtual assistants, available round the clock, are a smart way of providing efficient customer service. They help free daily routine tasks and help customers know their transaction details or any other information they wish to know.

  • Trading & Securities

    Banks use AI for reconciliations in over-the-counter derivatives, forex transactions, for target balancing and validation of information in the back office with trades enabled in the front office. Robotic automation of processes (RPA) helps to review and transform processes by automating 80% of repetitive work processes and leaving knowledge workers free to use their time in value-add operations that require a high level of human intervention.

  • Credit Assessment

    AI helps banks in their most critical business of lending by analyzing the creditworthiness of individuals or businesses seeking loans. AI can check the data sources about the borrower to generate a coherent decision.

  • Wealth Planning & Portfolio Management

    Personal wealth planning has reached a new level with AI as for every purchase or investment, clients get guidance for the proposed outlay and loan approval limits based on current income and expenditure. Banks rely heavily on machine learning to make intelligent, real-time investment decisions on behalf of their investors and clients. Data is an important aspect of their decision making and it also allows them to experiment with different strategies and consider a more diverse choice of assets.

  • Digital Wallets

    AI has brought in digital wallets which is fast becoming the future of payment technologies. Apps like Apple, PayPal, Google Pay, Paytm and others have increased the cashless transactions and given a whole new meaning to the concept of buying, selling or paying.

  • Voice Assistant

    Voice Assistant has been one of the most useful applications of AI as it has enabled the customer to use banking services with touch screens and voice commands. IVRS helps to process customer requests, answer questions, connect users to various banking services and provide the required information eliminating human effort, time and the possibility of human error.

  • Prediction of future outcomes and trends

    AI has the power to predict future scenarios by analyzing past behaviours and helps banks to identify fraud, detect anti-money laundering pattern and make customer recommendations and successfully up-sell and cross-sell.

    AI reviews and transforms processes by applying Robotic Process Automation (RPA). This enables automation of about 80% of repetitive work processes, allowing knowledge workers to dedicate their time to value-add operations that require a high level of human intervention. Companies like Nelito have started using RPA for enterprise regulatory reporting, which automatically adheres to meet the levels of regulatory reports standardization.

In conclusion, banks are today leveraging an AI and Machine Learning based technology platforms to boost efficiency levels and transform their businesses. It is helping to understand the challenges and provide intelligent insights towards effective decision making. AI, with a comprehensive group of technologies, is improving performance by bringing in automation and is supporting constant growth.

Artificial intelligence will not replace physical banker but will optimize how banks work by helping them become more agile, make smarter decisions, and stay more competitive. With a combination of intelligent agents, modern apps, and machine learning, AI is showing the way to help banks turn data in insight, transform ideas into action, and turn change into opportunity.

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