How AI Is Transforming The Banking Industry
- January 5, 2021
- Posted by: SmartPoint
- Category: Robotic Software Consulting
Banks play an important role in the economy. Virtually, everyone depends on them for buying and selling things. Given the importance of these financial institutions, they constantly ensure that their operations are uninterrupted, accurate and agile.
Banks that are still using legacy systems face a myriad of operational challenges. They range from performance problems, processing limitations to security issues. However, rapid advancements in technology has enabled banks to combat these bottlenecks with effective digital solutions.
In order to continue offering quality services, banks are increasingly adopting Artificial Intelligence (AI) technology. It benefits both banks and their customers. The former can function better and the latter can flexibly, seamlessly and quickly access a wide range of banking services. Let’s take a look at how exactly AI is making a huge positive impact on these institutions.
Frauds in the banking industry amount to millions of dollars in losses every year. Be it cheque frauds, online frauds, cyber attacks or any other, banks struggle to resolve and mitigate these rampant issues on time.
AI can routinely verify transactions in real-time. It can take up independent decisions as to whether a transaction should be permitted, kept on hold or stopped for security reasons. AI performs such functions by routinely scanning financial activities and analyzing the history of customers.
Credit and loan processing
Availing a loan is usually a time-consuming and paper-intensive process. Banks have to perform a myriad of background checks on the customer before lending money. Any errors or missing data in this complex process leads to more delays and frustration.
AI solutions can efficiently assess the creditworthiness of a client by analyzing massive data about him/her within seconds. It is an accurate tool to predict how likely an individual or business is to pay back loans. AI also comprehensively checks the digital footprint of customers such as purchase history, online activity and more.
It is quite common for customers to wait for more than 5 minutes to talk to a bank representative. Parallely, banks also find it difficult to answer thousands of questions over phone calls everyday.
Instead of increasing the size of the customer support team, banks can instead integrate chatbots. They are AI-enabled software applications that communicate with and answer customer questions using Machine Learning (ML) and Natural Language Processing (NLP). Chatbots work round-the-clock, can handle thousands of questions and offer instant and accurate responses.
Banks spend a significant portion of their revenue in pushing out attractive banking schemes to attract customers. But if they consistently target their promotions towards people who are not interested, it results in subpar returns.
On hiring AI development services, AI can scan millions of customer records and observe consumer behavior to identify which customers are likely to avail an offer. Thereafter, banks can send out bulk targeted messages to them and reap higher profits.
Carrying out day-to-day banking activities depends on a large pool of talents such as analysts, customer executives, managers and more. As much as these resources are important, it is also expensive to hire them.
AI does not take over human jobs, but complements them. It can analyze and consolidate reports, talk to customers, make important decisions and more with little to no staff intervention. This enables banks to significantly cut down on expenditure.
The banking industry is undergoing colossal changes since the standardization of AI. By adopting AI, financial institutions in this domain are able to minimize operating expenses, automate tedious processes and perform tasks with accuracy. If you’re looking to take your banking operations to the next level, then what you need is our highly acclaimed AI development services. Contact leading experts in our AI development company today.