Change is always permanent in the universe. When it comes to technology, you are always bound to get new updates. Have you taken a keen outlook of the recent technological innovations? The entire globe is abuzz with Artificial Intelligence, Machine Learning, Internet of Things, Cloud Platform and more. However, Artificial Intelligence aka AI has been the primary point of contention in many sectors, especially banking. for this article titled – How Banks Aim for New High with Advanced AI, you will get to know the valuable inputs of AI in the banking sector.
Why did the Banking Sector embrace Artificial Intelligence?
Take a look at the global population. Majority comprise millennials in the age group of 27 to 42. This group’s preferences have changed the concept of services in every industry and banking is no exception. The millennial population wants to have services where products are delivered at their doorstep. The very concept of a physical bank or other businesses is gradually turning obsolete.
Even some non-millennials have shifted completely towards online banking in the pandemic. For too many decades, the banking industry have been at their toes to become a people centric sector rather than a customer-centric one. With the help of Artificial Intelligence, they have levelled the odds. Bank customers now want to avail of banking services any time of the day. So, a bank (domestic/international) has to remain functional 24/7/365. Meanwhile, Cybercrime incidents and online scams are rising at an alarming rate and banks are investing heavily on the security of their platforms and services. With the help of AI, banks have ensured that their online platform has the best security protocols and software.
Best Proven Examples – Positive Impact of Artificial Intelligence in Banking and Finance Sector
Banking services have always attracted criminal activity. When it comes to online transactions, banks have found it difficult to combat cybercrime just through means of a human workforce. However, they can heave a sigh of relief as AI and ML have enabled them to combat all types of cybercrime, ranging from ransomware to hacking technologies.
Listed below are some of the very few examples which international banks have adapted to prevent cybercrime in their operations:
- JPMorgan Chase developed the “Early Warning System” to identify phishing campaigns. This system intimates the security department of fraudulent activity before the bank’s security gets compromised.
- HDFC Bank Ltd (India) has its own artificial intelligence program in the form of EVA, Electronic Virtual Assistant. It uses Natural Language Processing to respond to customer queries.
- ICICI Bank (India) has, iPal, the chatbot. It can respond to customers in the form of voice command and personalized offers.
- Ally Financial is well-known in the banking industry. Its mobile app makes use of a chatbot to respond to queries, payment summaries and transfers. This chatbot has the ability to respond to both customer texts and voice queries.
- Then there is the example of AI virtual assistant such as Eno in Capital One. Its special features – communicate with customers via an email, text and also on app as well as desktop. This app has features to track balances, check transactions, pay credit card bills and many more.
Artificial Intelligence in Wealth Management & Stock Trading companies
In wealth management and stock trading, you need to take instant decisions. A miscalculation can prove to be a big loss to an individual’s wallet or even a country’s exchequer. AI can help a trader wade through thousands of data in mere seconds. Then it can help him/her make the right decision in buying out stocks, bonds or shares. The best example is the “Next Best offer” project in Deutsche Bank.
DBS Bank Ltd, Singapore, has its own wealth management app, by the name, iWealth. This app offers the best recommendations in the form of financial management.
AI in Banking & Finance Sector
Identifying Criminal Activity with Artificial Intelligence
Designed to track suspicious financial crime activity, Black Forest AI model is well-known in the banking sector for helping to reduce cybercrime. A bank, physical or online, has to perform a lot of transactions in various forms. Example – paying bills, withdrawing money, depositing money in the form of cheques or transfers. The top challenges happen when customers conduct online transactions via the bank app. So, banks always need to stay a step ahead of hackers and cybercrime enthusiasts. Black Forest AI model has come as a shot in the arm to combat online banking crime.
This model has the capability to analyse transactions in millions of customer bank accounts within a short time. If Black Forest identifies a suspicious activity in any account, it promptly sends the findings to the account manager and cybercrime department of the bank to take relevant action.
Chatbots
Chatbots made a big impact since its introduction half a decade ago. Today, every bank has its own chatbots in customer service operations. Embedded with AI, and tuned to the T to give relief to customers, they can work more efficiently 24*7 when compared to humans.
Companies developing Artificial Intelligence-based chatbots have designed their capabilities so that they can upgrade themselves to suit the question modules & patterns of customers. The upgrade pattern helps chatbots to provide personalized service to customers as well as recommend suitable financial service products.
- The best example of banking chatbot is Erica, Bank of America’s Virtual Assistant. As per records, this AI chatbot handled more than 50 million requests for card security updates and reduction for credit card debt.
- The second-best example of AI chatbot in banks is the Interactive Voice Response System (IVRS), which gives voice assistance to customers. The AI-enabled system gives the best guidance by not only understanding their queries, but also routing calls to the right department. If the customer has a simple query, the system is designed to give the perfect solution.
Future of Artificial Intelligence in Banking
There is no way, you could not have heard of ChatGPT in 2023. Within a few months of its release, it has garnered more than a billion active users. As you know, it uses a variety of programs and techniques such as natural language processing, machine learning and others to not only understand but also give the best responses to customer queries.
In the future, AI will be used to complete more manual tasks in banking operations thus making way for human executives to deal with complex issues that cannot be solved by software programs.
Virtual Assistants (VA) can become upgraded to match the level of human intelligence. They will serve as a single point of contact for all customer queries. These VA will be able to respond not only via mail, but also through texts, apps and in the customer’s preferred language. In this way, the customer will get a personalized experience.
Mentioned above, are only two of the positive changes Artificial Intelligence has brought over to the global banking industry. However, if you want to know about the latest developments about the positive impact of artificial intelligence in banking and finance sector, keep visiting our website for more updates.
Blog by Sathya Narayana B
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