These days, technologies like Artificial Intelligence are products up the industries such as trading, robotics, healthcare, manufacturing, and many more and also changing their operations. Artificial intelligence has been transforming every function of the industry. Almost every sector evaluates the possibilities and takes ways to maximize and add value in this technology-driven world, and the banking industry is no exception. Artificial intelligence has revolutionized the banking sector significantly.
According to IDC’s research, nearly 5.6 billion dollars is predicted to be spent on AI-powered services in the banking sector by 2022. And as per Accenture’s report, The AI will add a value of 1.2 trillion dollars to the banking industry by 2035. With the evolution of Smartphone technology, enormous data accessibility, quick response requirement need, and prevalence of open-source services- the AI concept is gaining immense importance inside the banking sector. Nowadays, AI is becoming a significant disrupter in the banking industry.
Some banks are already incorporating AI technologies such as predictive analysis, voice assistants, chatbots, smart apps, and many more in their daily processes. AI has to approaches to evolve banking industry like:
- Front-end operations of AI include direct interactions with customers, applications, payment gateways, chatbots, and digital wallets.
- Back-end operations of AI ensure easy processing of a large amount of data, data analytics, report making, fraud less transaction, etc.
In this blog, we’ll see how Artificial Intelligence is transforming the banking industry. So let’s go.
How Artificial Intelligence is transforming the banking industry?
Today, many banks have already started using AI to minimize costs, reach margins, and exceed customer’s expectations by past observations. As Artificial Intelligence is layered into its business model and growth strategy, banking institutions are compelled to reframe their way of operating entirely.
Below are some ways Artificial intelligence is shaping the banking industry.
1. Early Fraud Detection
No business wants risk conditions that surround its operations and banking industry too. Banks would be under massive pressure with the advent of digital banking apps to safeguard customers and client’s information and assets from cyber threats. Artificial intelligence is a top-notch technology when it comes to securities from fraud or any other miss use. With AI integration, you can detect suspicious transactions based on defined rules and questionable activities based on customer behavior and past transaction history. Via AI, a falsified money transfer can be blocked, the forex market can be verified, or even a credit or debit card payment can be approved within seconds.
For instance, they use a card from some other country only a few hours after being used somewhere else or trying to withdraw an amount of money abnormal for that account in considerations. Artificial Intelligence could slow down the transaction immediately until an individual has authenticated it.
2. Customer Support/Service
By integrating online solutions, Artificial Intelligence has revolutionized customer satisfaction to a tremendous considerable extent. Previously the clients would have to traverse through many pages on the bank’s website. At the same time, Artificial intelligence could also do that in a chat ecosystem with a short conversation with a bot. The simplicity and high functionalities of such technology make the clients be with services offered by banks. Most importantly, Through Artificial Intelligence service, you could be available anywhere at any point of time whenever the clients may need help. AI in mobile banking apps smoothly and economically serves its clients, making it possible for staff to spend a bit more time with clients to understand their necessity for financial service better and provide the best services.
Chatbots are a brilliant addition to a bank’s arsenal of customer engagement and brand awareness. For a little while now, Artificial Intelligence has made chatbots more powerful and efficient. Using Artificial Intelligence to continue driving chatbots can help your clients use their account-related inquiries and requests. These requests and questions may range from previous transaction history, history of purchases, balance-related inquiries, etc. Artificial Intelligence chatbots are remarkably efficient because, at any time, clients or customers can easily have all the relevant information they require immediately. Clients or customers would not have to queue to speak to a spokesperson of the customer support, that might not have all of the details required by prospects.
4. Automatic Upselling and Cross-selling
Artificial Intelligence can learn consumer behavior trends and inevitably recommend upselling and cross-selling to clients who are likely to benefit from it. It could also formulate additional upselling and cross-selling to your banking staff who directly interact with clients and customers. Posting banner ads and pop-ups for upselling and cross-selling will sometimes work and sometimes not.
What if a chatbot handles customers and prospects with name and past transaction history? Undoubtedly, customers and clients will respond more on alert rather than clicking on the banner ad. It will complete simple upsells all alone and sends leads to your banking staff for further discussion.
At first, Banking firms have relied on computers and data physicists to evaluate future market trends and patterns from large data sets. But these days, banking firms use Artificial Intelligence to reconcile counter securities, foreign exchange, target balancing, and validate relevant data. Artificial Intelligence also formulates portfolio solutions that meet the demands of each person.
For instance: If a person with a strong-risk desire relies on Artificial Intelligence, then AI helps him to decide when hold, buy or sell the stocks, and when there is a lower risk, then it will alert you regarding when the market is going to fall and to take necessary decisions whether to stay your money invested in the market or to move out.
6. Credit & Pricing Assessment
Artificial Intelligence-driven systems will provide instant appraisals when assessing a client and customers’ credit risk to provide their customers and clients with the best offers. Artificial Intelligence can lessen the delivery time for cost and reinsurance services to pace up the whole process and improve client experience and make customer proposals more efficient and effective.
7. Cost Efficiency
By Artificial Intelligence integration, banking institutions can cut the recruiting workforce’s price effectively and efficiently and provide excellent customer support and service. It makes the entire process relatively cost-effective because it can meet the growing demands for keeping lean operations while providing customers with an outstanding and incredible experience at a lesser cost.
For example: incorporating digital KYC (Know Your Customer) can reduce response time while approximately 90% limit the on-board rate by consolidating to 70%. These numbers and statistics add up to hundreds of thousands of dollars each year for many banking institutions that can be rightfully reinvested into their other research and development.
8. Voice Recognition and Early Prediction
9. Define Credit Capacity
To identify whether the customer is creditworthy or not, banking institutions rely on aspects like credit score, history, and several transactions. It is where Artificial Intelligence does wonders. Now banks Artificial Intelligence systems and algorithms to analyze the client’s behavior and patterns to determine whether the client is good or not for loan. Decisions taken with the help of Artificial Intelligence systems are more accurate than decisions taken by a human. According to experts, many experts believe Artificial Intelligence systems will replace humans’ operations in the coming years.
10. Digital Wallets and Compliance
Artificial Intelligence brings the concept of digital wallets, which is vastly becoming the future of payments. Smart apps like PayPal and google pay are giving the new way of buying and paying for goods. Artificial Intelligence can recognize all relevant laws like anti-money laundering regulations and abide them, eliminating human errors from compliance. NLP (Natural processing language) could analyze legal documentation, thus providing a much more broad analysis of involved parties, procedures, and legislation.
So, here are the few benefits that Artificial Intelligence offers to the banking sector. Undeniably, the banking sector gets an ideal approach to enhance its operations. Moreover, people also relishes the banking services with a new twist and turns. So, what are you waiting for? If you are an entrepreneur from the finance sector, then hurry up, integrate AI solutions in your working paradigm and take your business to the next level. To know more about AI in detail, feel free to reach out to us; the team at Matellio is always ready to serve you the best.