aking use of artificial intelligence (AI) in the banking industry will allow banks to digitize and meet their customers’ needs. AI can also enable banks to stay ahead of the curve, despite the competition from other financial companies.
Both the banking and finance sectors have quickly adapted to make use of AI. According to Insider,56% of financial service providers are already using AI for things like predictive analytics and voice recognition. There are many benefits to using AI in the banking and finance sectors.
Here’s how artificial intelligence can be used in the banking sector to help with business processes:
Traditional banking is often not convenient. Without prioritising convenience, banking is not able to satisfy the needs of most of its customers. This is especially true for millennials, who expect convenience in their interactions with a business.
The adoption of AI has caused a technological revolution in banking resulting in opening up a lot of new opportunities for banks.
The biggest issue for many banks is long queues, which nobody wants to stand in, especially when you have other things that you need to do. Chatbots and other kinds of virtual assistants can fix this problem, allowing customers to do everything that they need at banks, without leaving their homes.
AI-based assistants use machine learning to develop customised financial plans, offers, and loans for every customer, based on their past behaviour, interest, and credit score.
AI can be used to optimise the day-to-day functions of bank customers, including account onboarding, transaction processing, digitalization of account receivable and payable, and setting reminders, amongst other essential tasks.
AI will analyse cash flow patterns and other behaviours of users to create reports. These reports can show users their spending patterns. This information can then be used to recommend products and services, based on a customer’s past behaviour.
Legacy infrastructures and business processes of banking institutions never leveraged data. Collecting and analysing data using AI analytics can help banks to turn their analytical data into a format that is easier to understand.
AI can help a business to develop and put in place precise marketing strategies. Marketing strategies don’t have to involve guess work anymore. Big data analytics have allowed for precise targeting of each user group.
With AI analytics, banks can improve operational efficiency. Using AI in the back office of the bank will also generate a reduction in operating expenses.
These savings come from saved staff hours and eliminating the number of errors through automation, faster customer service, fewer frauds, and better customer experience. All of this also boosts return on investment (ROI).
AI can help banks to manage and mitigate potential risks if you monitor the results. SAS report that 74% of successful companies review their AI outputs at least once a week.
Financial industries, including banks, depend on external global factors. Scams, fluctuations in currency, natural disasters, or political unrest can profoundly change these industries. During volatile times like these, business decisions should be taken very cautiously. AI-driven analytics can give you a clearer picture of what might happen, so you can be prepared, and able to make timely decisions.
AI can find risky applications by evaluating how probable it is that a client will fail to pay back a loan. It predicts this future behaviour by analysing patterns in past behaviour and smartphone data.
Financial fraud and cybercrime cost banks and FinTech billions of pounds each year. AI can be used to help to prevent fraudulent activities in the banking sector.
AI can be used by banks to replace manual auditing. The manual way is prone to error and does not have the capacity to audit all data sets. If some files or data sets are missed during a manual audit, it can cause a considerable loss to a bank. The algorithmic rules-based approach of AI helps to analyse each file, while machine learning can identify risky files and data.
Cybercrime has increased in recent years. AI can be used to tighten up cybersecurity and protect customer data. AI can also be used to detect fraudulent transactions or other suspicious activity in a customer’s account based on analysis of past behaviour and transaction history.
Chatbots and virtual assistants are one of the best tools for sales representatives, some of the reasons behind this are explored below:
Chatbots should not be forgotten about as part of the way AI is used in the banking industry. It can’t be overlooked, because of how much they have changed customer service and experience by helping customer service staff.
Chatbots can offer huge savings to industries like healthcare and banking. By using AI, you save on time and salaries. According to a study by Accenture, AI can help banks reduce their costs by 25%.
One of the key benefits of chatbots is that they can save both customer service agents and customers time. Chatbots can save a few minutes of a customer service agent’s time per customer, which adds up to a lot of time throughout the day that can be put to more effective use.
Chatbots can allow banks and other companies in the finance sector to combine their self-help library with their chatbots. By doing this, all frequently asked questions can be handled automatically without a live agent needing to get involved. If a customer has a more complex query, then the chatbots can automatically route them to a live agent.
Customers often want access to banking at all times of the day and night. With chatbots driven by AI, banks can implement 24/7 customer service that solves all customer queries and problems, regardless of the time.
We hope that this article has opened your eyes to the ever growing benefits of AI to banking businesses.
Gemraj Technologies Ltd can provide your banking business with all of these AI benefits, so that you can future-proof your services in a cost-effective way.