AI IN BANKING
The contemporary age has been renamed as the age of Artificial Intelligence. Be it science, technology, agriculture, business, and whatnot, each one of it has its unique journey to undergo modernization with the expanding human intelligence. And when it comes to finances, banking then it necessitates the need for intelligence. Evolution in the field of finances had embarked millions of years ago, starting with the emergence of the banking system, installation of ATM machines, striking with a technological hit, and finally automated with artificial intelligence.
What is Artificial Intelligence?
Artificial Intelligence, acronymically known as AI, is the simulation or imitation of human intelligence to use it in machines and program them to think in terms of humans and to mimic their actions. In the present scenario, big tech companies, pharma companies, agriculture, cybersecurity credit bureaus, every sector is driven by AI. Amidst all such sectors, banking is another domain proliferating with AI. Let us try to find reasons to why is AI proving to a good fit in improving operations and profitability:
- A decade ago, there used to be brick and mortar offices, contact centers which remained thronged with people most of the time. They have recently got superseded by virtual platforms which made consumers fast forward to the utmost level.
- There is a notable shift in the paradigm of transaction flow. Digital payments using the internet have become the preferred mode of transaction for the consumers.
So, this is the way AI is getting adopted by the banks to cater to the world’s demand.
According to autonomous Next research seen by Business Insider Intelligence,” The aggregate potential cost savings for banks from AI applications is estimated at $447 billion by 2023, with the front and middle office accounting for $416 billion of that total.”So, the outcomes seem exhilarating and cost-saving. Banks are leveraging AI at the three ends:
- Front end for conversational banking through voice assistance, chatbots, and more personalized consumer assistance.
- Middle office to combat fraudulent banking scams. It aims at improving anti-money laundering (AML)and knows- your- customer (KYC) regulatory checks.
- At the back office level, it deals with underwriting
Such vital psychological intelligence can be gauged by listing out prime use cases:
Such vital psychological intelligence can be gauged by listing out use cases:
PORTFOLIO MANAGEMENT:The innovative AI technology manages bank services and bolsters mobile banking operations.It has brought a paradigm shift in the lives of the users who cannot visit banks frequently.It facilitates users with instant notification,while making online transactions.
It also automates credit and debit card management systems, thus making transactions way more reliable and secure.
CHATBOTS/DIGITAL PERSONAL ASSISTANTS:Chatbots have captivated the attention of the customers in a significant way .It assist customers by responding to their doubts,thus providing a personalised experience to users. Intelligent mobile apps track user behaviour and provide needful personalised suggestions to them.An example of a popular AI chatbot in fulfilling the banks customer service requirement is Erica,introduced by Bank of America.
BRINGS AUTOMATION :Artificial Intelligence have reduced the workload in banks considerably.Manual works which used to consume long hours can now be served by technology in fraction of seconds.It clears the need for standing in long queues for the customers to get their doubts cleared .
RISK MANAGEMENT FUNCTION:AI helps the bankers to interpret the behaviour of the borrower by analysing banking data of the borrower.For example:disbursing loans is a bit complicated task for bankers .It need to maintain the confidentiality of user sensitive data while disbursing the amount.
AI can do this task with more accuracy and privacy.AI- based machines and mobile banking applications can easily track the recent financial activities .This could help the banker to presume the risks of fraudulent acts.
AI FOR COMPLIANCE IN BANKING:AI based software products can actively find the rules that apply to the banks and make them compliant with existing compliance rules and regulations which if done manually consumes long hours and huge amount of capital.Big organisations before making financial relationships with banks ensures if the banks follow regulatory compliance rules.Thus AI strengthens the ties of the banks with the organisation.
Benefits Of AI in banking:
❖ It reduces operational costs and workload. It cuts off the need for manual data entry and other human processes. Thus saving time and eliminating costly mistakes.
❖ AI in banking will be able to cater to their customers faster, with more efficiency and at all times of the day. AI being able to produce personalized insights and connect customers to the right products.
❖ Banks are already one of the highly regulated institutions and must comply with the strict government regulations in order to prevent defaulting or not catching financial crimes .AI proved effective in combating bank’s risks.
“CONSUMERS WILL DEMAND IT. TECHNOLOGY COMPETITION WILL NECESSITATE IT.
THE CHALLENGE IS BANKS AREN’T BUILT TO DELIVER THOSE CAPABILITIES.”
Here, the CEO of CapitalOne clearly depicts the situation of AI in India. Reasons accounting for the same are
❏ Data silos and outdated IT infrastructure. Within a single organization, we are still full of systems that can’t communicate with others in the same department.
❏ Second is hype-driven goal setting when it comes to AI, people have the narrative that it is going to solve all in one single night.
When Likhit Wagle ,General Manager, Global Banking and financial markets, IBM mentioned in one of the conclaves that Chinese Banks are the leading ones who have incorporated newer technology in their market because they transform as per the prevailing trend of customer demand, unlike Indian banks which predominantly still continue to rely on traditional means to gather financial information. Thus, India has a long way to go.
Automaton AI Infosystem Pvt. Ltd understands how Artificial Intelligence can transform the banking sector and make it function more efficiently. It provides services including:
- Data labeling services
- Custom AI applications
- Chatbot service
- ML Model development, optimization, and deployment services
- Micro-architecture services
- Cloud deployment services
In addition to this, Automaton AI offers a powerful tool called CLARITY which has been specifically designed in order to cater to banking requirements.
Clarity is a powerful AI weapon that banks can utilize from performing Intentional Loan Defaulter Analysis to liquid cash management in the branches. It’s uniques features encompass :
- Automated Data Pre-Processing
- Statistical Distribution of the data
- Automated ML Model Selection
- Bank data mapping tool for ML data preparation
- Data Security
- Keep track of your data
- Result Analysis and Model Training
- Automated Evaluation Matrix Identification for the models
If you are looking forward to revolutionizing your banking services via the CLARITY tool, you would love to check www.automatonai.com for more.