Artificial intelligence (AI) is rapidly making its mark in various aspects of modern life, and the banking sector is no exception. Utilizing AI technology has allowed banks to improve the quality of their services and expedite service provision. While the industry is still in its early stages of AI adoption, experts predict that the next generation will experience the full potential of recent developments in machine learning and open API, among other areas.
Banks are currently implementing AI through a range of pilot projects, with the primary focus on “Narrow AI”. This technology enables banks to solve specific tasks efficiently. For instance, chatbots have become widespread in banking, providing assistance to customers. While they are valuable tools, chatbots have limitations and are unable to handle all customer inquiries. On the other hand, AI has proven to be a mature technology in areas such as client scoring, biometrics, computer vision, and antifraud measures.
How Banks Leverage AI
The integration of AI has enabled banks to offer clients access to a wider range of banking products and services efficiently. This is one of the key advantages AI brings to the industry. Furthermore, AI helps banks save millions of dollars in operational costs, allowing them to provide more appealing offers to clients. Below are some examples of how AI is used in the banking sector:
Client Scoring: AI-based client scoring systems automate credit decisions. Previously, processing loan applications from large business companies would take weeks. With AI, this process now takes only about 7 minutes, with no paperwork required. This rapid turnaround time is a significant achievement, enhancing customer satisfaction.
Chatbots: Many banks employ chatbots to accelerate the consultation process and reduce operational costs. However, there is room for improvement as chatbots can currently address only a limited range of customer issues. Human intervention is required in over 50% of cases.
Antifraud and Financial Monitoring: AI is used to combat financial fraud by analyzing client behavior and promptly alerting banks of any suspicious activity. This applies to individual as well as corporate bank clients.
ATMs: AI can analyze the workload of each ATM and determine the appropriate amount of cash to be replenished. This feature helps banks further optimize operational costs.
Document Processing: AI is employed by some banks to process applications for bank account opening and other financial operations requiring client identification. Within two seconds, AI can extract approximately 70 data points from scanned documents or photographs, and confirm client identity based on around 15 different parameters.
From Risk Assessment to Personalized Services and Emotional Analysis
While AI was primarily used in the past for credit scoring, risk assessment, and chatbots, its applications in the banking sector have expanded to include personalized client experiences and emotional analysis. Emotional neural networks can determine a client’s satisfaction level with banking services without the need for surveys.
Personalized banking services represent a promising area of growth. Large banks have millions of customers and offer hundreds of banking products. However, attempting to provide all services to all clients would be inefficient. AI solves this problem by accurately identifying the services or products a particular client is likely to be interested in based on their data. This significantly enhances the bank’s efficiency.
Using machine learning technologies, AI recognizes behavioral patterns in client transactions, allowing for personalized offers in real time. By analyzing a client’s situation, AI can recommend products that align with their interests. For example, if a client has recently spent a significant amount of money and has been researching credit ratings, it indicates a potential interest in a loan. Similarly, a client with available funds who is exploring investment-related information on social networks may be interested in one of the bank’s investment products.
AI analyzes each client’s activities on the bank’s website and mobile application, creating personalized profiles. Based on these profiles, AI tailors specific banking products offers. This approach is particularly attractive because it involves no human bank officers in profile creation and product recommendations.
AI not only benefits the bank but also enhances the client’s experience. It can serve as a reminder for specific purchases the client frequently makes or even alert them if they enter the wrong PIN code. This level of proactive support from the bank fosters a stronger connection with clients.
Another essential consideration for banks is the channels their clients prefer for banking operations. Many entrepreneurs conduct business using popular messaging platforms. To accommodate these preferences, banks have installed AI not only on their own websites and mobile applications but also on these popular messengers.
Location Intelligence
AI plays a crucial role in deciding where to open new bank branches. Location intelligence technology aggregates information from existing branches to assess potential workload and efficiency of prospective locations. Various factors, such as types of client activities, competitor analysis, resident population, and traffic patterns, are considered. AI provides banks with data-driven recommendations for the most suitable branch locations.
Artificial intelligence is revolutionizing the banking industry by enhancing efficiency, personalization, and security. As AI continues to evolve, banks will unlock even greater potential to meet and exceed customer expectations.
FAQ
- What is Artificial Intelligence (AI)?
- How do banks use AI?
- What are the benefits of using AI in banking?
- Can AI replace human bank officers in the future?
- Is AI secure in the banking industry?
Artificial Intelligence (AI) refers to the simulation of human intelligence in machines, allowing them to perform tasks that typically require human cognitive abilities, such as learning, problem-solving, and decision-making.
Banks leverage AI technology in various ways, including client scoring, chatbots, antifraud and financial monitoring, ATM optimization, document processing, personalized services, emotional analysis, and location intelligence, among others.
The use of AI in banking allows for faster access to banking products and services, cost savings on operational expenses, improved risk assessment, enhanced customer experiences through personalization, and efficient fraud detection and prevention.
While AI systems have become increasingly capable, there will always be a need for human bank officers in certain situations. Human intervention and expertise are crucial for complex inquiries, problem-solving, and building trusted relationships with clients.
AI plays a significant role in enhancing security in the banking industry. AI-powered systems can analyze client behaviors, identify suspicious activities, and promptly alert banks to potential fraudulent behavior.
Sources:
– [BankingTech](https://www.bankingtech.com/2021/02/how-ai-is-shaping-the-future-of-banking/)
– [Deloitte](https://www2.deloitte.com/global/en/pages/financial-services/articles/how-artificial-intelligence-is-making-business-ingellifent.html)
- What is Artificial Intelligence (AI)?
- How do banks use AI?
- What are the benefits of using AI in banking?
- Can AI replace human bank officers in the future?
- Is AI secure in the banking industry?
Artificial Intelligence (AI) refers to the simulation of human intelligence in machines, allowing them to perform tasks that typically require human cognitive abilities, such as learning, problem-solving, and decision-making.
Banks leverage AI technology in various ways, including client scoring, chatbots, antifraud and financial monitoring, ATM optimization, document processing, personalized services, emotional analysis, and location intelligence, among others.
The use of AI in banking allows for faster access to banking products and services, cost savings on operational expenses, improved risk assessment, enhanced customer experiences through personalization, and efficient fraud detection and prevention.
While AI systems have become increasingly capable, there will always be a need for human bank officers in certain situations. Human intervention and expertise are crucial for complex inquiries, problem-solving, and building trusted relationships with clients.
AI plays a significant role in enhancing security in the banking industry. AI-powered systems can analyze client behaviors, identify suspicious activities, and promptly alert banks to potential fraudulent behavior.
For more information on AI in banking, you can refer to the following sources:
– [BankingTech: How AI is Shaping the Future of Banking](https://www.bankingtech.com/2021/02/how-ai-is-shaping-the-future-of-banking/)
– [Deloitte: How Artificial Intelligence is Making Business Intelligent](https://www2.deloitte.com/global/en/pages/financial-services/articles/how-artificial-intelligence-is-making-business-ingellifent.html)
The source of the article is from the blog be3.sk