Artificial intelligence (AI) came into limelight in 1950 when mathematician Alan Turing published a paper titled; “Computing Machinery and Intelligence.” Since then, there has been an intensified level of research on the benefits of AI and how well it can be incorporated into our daily routine at homes and offices.
Machines and equipment used in the workplace are getting smarter; they have shown a considerable amount of importance in their ability to improve customers’ experience while enhancing employee’s efficiency and overall output. This article seeks to examine 20 use cases of how AI is revolutionizing the banking sector and how banks can benefit from the vast levels of efficiencies it provides.
Data gathered from research conducted by Mercator revealed that there are over 70 different AI solutions that have been adopted by large banks to improve the level of services they offer to customers. The ability to identify and adopt these technological solutions is what separates the successful and the not so successful businesses in the world. A recent survey conducted on the 70+ potential solutions that exist in the banking industries shows that AI has played an active role in the following areas;
- Transactions and Payments: AI has revolutionized the methods of payments in major banks around the world such as in the generation of automatic checkbooks, credit and performance evaluation of customers. The adoption of AI is making banking transactions more customer-friendly, and it has been identified to play key roles in the provision of an automatic machine controlled services like Automatic Teller Machine for e-banking, phone banking, credit, debit, and smart cards. Companies such as Kasistoare on the forefront of affairs in offering chatbots which can help banks and financial institutions teach their customers how to make payments, fetch transaction and account details and manage their finances.
- Customer care services: the introduction of chatbots and Virtual customer care representatives has increased the level of activity recorded in terms of customer care services. They are available round the clock and are highly efficient. A research conducted on The Impact of Virtual agents on Customer loyalty in Major Swedish banks revealed that AI has a profound effect on customer behavior and reliability. They have been utilized in the provision of financial advice and self-service.
- Information gathering and dissemination: Information determines client awareness and responsiveness. The introduction of chatbots and virtual agents can assist clients in obtaining important information on their bank details, transaction history and investments from the comfort of their homes thus decongesting long queues at the bank. Sigmoidal and other machine learning consultancy agencies have assisted banks in developing a trading software that tracks customer spending, investment patterns and make financial decisions based on the data available to it. The software can also scout for news and keep the customer informed on investment opportunities and how best to invest.
- Investment and market analysis: AI can be integrated into the automation of wealth management services through the use and provision of powerful algorithms to provide the users with detailed information on investment decisions from liquidity factors or risk appetite. Based on the submissions of Deloitte, the use of robo-advisors to analyze algorithms and investment logic will become an invaluable investment tool in the nearest future.
- Robust and rapid data processing needs: Smart machines through the integration of AI can be taught to consume and process a large body of data which translates into efficiency in financial services and customer satisfaction. They have been used in the evaluation of large data and the conduction of in-depth analysis to detect fraudulent activities and provide customers with the needed guidance. Financial institutions like the NY Mellon Corp. are playing leading roles in the implementation of Robotic Process Automation (RPA) to improve efficiency while cutting costs.
- Data management: There is a great potential in the ability of AI to control the level of data storage, backup, and recovery through the infusion of algorithms that can identify and apply policies to sensitive data and automate workflows. These data will need to be stored in the cloud to automate the management of massive amounts of data. The introduction of SAS has created a platform where banks can improve the level of data management and the customer experience in banks. SAS offers a platform with a cloud-based solution that enhances data management in banks.
- Mobile channels: The integration of AI in mobile banking will give customers the privilege to control their financial transactions, make inquiries and access support from the comfort of their homes. Mercator discovered that these mobile channels are setting the pace for the new levels of innovations in the banking industry.
- Cloud-based computing and storage: Cloud-based applications have been created to assist banks with customer relationship management, accounting, and human resources. Data gathered from PwC reveals that more financial institutions will switch over to the use of cloud software for asset management, credit scoring, monitoring and evaluation of client transactions, customer payments and service offerings by 2030. These cloud-based computing techniques will reduce the average waiting time and improve customer satisfaction.
- Security: Cybercrime was regarded as the most reported crime in 2016. The possibility of experiencing these attacks increases daily and data gathered from a survey conducted by Cyber Ventures estimated that by 2021, about $6 trillion would be lost to cybercrimes. The integration of AI tools such as heuristics, fuzzy logic, pattern recognition, data mining, machine learning, artificial immune systems, intelligent agents, neural networks and computational intelligence can give banks the privileges of arresting such situations and improving customers’ confidence on their services. This technology has been adopted by The First National City Bank of New York with other banks to follow.
- Enhancement of investment logic: there is an intensified effort aimed at utilizing the benefits of robots and smart devices to provide financial advice to people. These bots have been designed with powerful algorithms to scout the market, conduct an adequate level of research and inform clients when it is best invest. AI companies like Information Age the integration of AI in the banking sector will change the face of investment by keeping the investor and professionals informed about investment decisions and how best to choose the right market.
- Personalized services: banks enjoy undeniable access to customer data such as website analytics, records of online and offline transactions, and detailed demographics. The use of AI and machine learning can assist these banks in analyzing this information and creating a personalized product to suit the needs of each customer. There are companies like Personetics that assist banks and other financial institutions to personalize their banking services through the integration of AI and machine learning applications.
- Reduced workload and office decongestion: AI is expected to serve as a perfect replacement for humans in banks. Their services can be utilized to reduce the workload and congestion in the office since fewer individuals will be needed to issue commands. The introduction of chatbots and other software from companies like Personetics and Kasisto can enhance customer care services and delivery.
- Portfolio and wealth management: Bots will replace financial advisors and serve as the best link for customers to manage their wealth and portfolio with little or no stress. The usefulness of AI in wealth management can be employed to perform tasks such as data review, analytics, and provision of insights to effectual trades. This will assist the customers to master the market and know when it’s best to invest.
- Card management system: Smart card transactions, security, and investments can be effectively managed by AI. It will offer the customers the best avenue to obtain the best from their smart cards even without visiting the banks. This can be achieved by chatbots that have been programmed to police card transactions and see to their maintenance.
- Risk management: Bots can be taught to study market trends and provide customers and bankers with the right market forecast while focusing on delivering the best financial counsel and investments. The integration of AI can identify risks and fraud cases and add value to customer experience.
- Fraud reduction: AI can be used to detect fraud in transactions through the integration of Convolutional Neural Networks which are equipped to use images as direct inputs and function in the same manner as the human cortex. With these networks, you can extract vital information concerning transactions and notice any irregular moves.
- Hedge fund management: This comes in handy in assisting bankers in fetching out real-time data from a wide range of financial markets in the world. These bots can analyze moods or sentiments and map out the best prediction to influence the user’s decision on investment and spending. Some major banks in the world are partnering with tech companies like Feedzai to evaluate big data, manage the fund and identify fraudulent activities.
- Process automation: it deals with the automation of financial institutions to perform more complex tasks with little or no human intervention. Process automation was utilized by JP Morgan Chase in the creation of COiN which reviews documents and extracts data in a fast and efficient manner.
- Budget and planning: Revolutionary AI technology can collect and analyze large data thereby assisting banks to budget and plan effectively. These accumulated data can be used to personalize investment plans and budgets for customers.
- Price determination: AI can be made to respond to the forces of demand and supply and determine just how much a client is willing to pay for a service. Although this has been utilized by online stores and service providers such as Amazon, Uber, and Lyft, it can be introduced to banks to determine customer behavior and level of response to certain policies.
A study from Statista predicts the total number of people utilizing the services of a virtual assistant to increase to over 1 billion in 2018. Another study reported that about 37% of the entire U.S population would own a digital voice assistant by the end of 2018. With time AI is going to take over every aspect of the banking industry from the investment to security and customer relations.
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