The banking sector is moving rapidly towards technology as the industry is stockpiling the world’s wealth in databases and transactions that merely exchange information through networks. Here, new-age technology, such as Artificial Intelligence (AI), will benefit the industry, from accounting and revenue to contracts and cybersecurity. Not only tech leaders, industry analysts, and researchers have agreed that AI would shape the industry in years to come as the main component.
Several banks are now teaming up with financial technology (FinTech) companies to provide their customers with innovative banking solutions in their attempt to digitalize. Considering research, AI is expected to save the aggregate potential cost to banks of about US $ 447 billion by 2023.
The Need of AI in Banks
In recent years the banking industry has undergone revolutionary changes using state-of-the-art technologies. Also, they broaden their industry landscape to include retail, IT, and telecom to allow mobile banking, e-banking, and money transfer services in real-time. But these are also leading cyber risks, as the transfer of sensitive information across virtual networks continues to grow, and banks fall prey to fintech players’ competition.
Moreover, using cognitive technology with AI brings the benefit of digitization to banks and helps them face the pressure that agile fintech leaders have raised. According to joint research carried out by the National Business Research Institute and Narrative Science, approximately 32 percent of financial service providers are currently using AI tools such as voice recognition, predictive analytics, among others.
In addition, there are many reasons why banks are increasingly implementing AI applications, including massive competition in the banking sector; pressing for process-driven services; consumer demand to provide more personalized solutions; growing employee productivity; a dream to extend human labor through the use of robotics software; generating operational efficiencies; taking effective decisions and taking effective decisions and much more.
Strengthening the Profitability of Banks
Today, banks leverage AI to optimize a range of processes, including Accounting, Merchant Services, Fraud and Cybersecurity, Risk Management, Compliance, Customer Care, Funding and Loans, Asset Management, Internal Audit, and Sales.
Most banks are very much aware of AI’s potential advantages as it provides:
Enhanced Customer Experience – Customer Support is at the core of every company. AI can be leveraged here to gain a deeper understanding of purchasing habits for customers that will help banks tailor products by complementing customized apps and building strong customer relationships.
Efficient Decision-Making Capabilities – Harnessing cognitive systems provides effective real-time strategies based on available data as it considers and reacts as human experts do. Such systems maintain a collection of expert knowledge in their database that allows bank managers to use it for making strategic decisions.
Future Consequences and Trends Prediction – AI helps banks envisage future results and patterns as the system is capable of analyzing past behaviors. It also helps to spot fraud, anti-money laundering activities, and make recommendations for clients. When AI detects such concealed actions, it helps save millions of amounts for banks.