Harnessing cognitive technology with Artificial Intelligence (AI) brings the advantage of digitization to banks and helps them meet the competition posed by FinTech players. In fact, about 32% of financial service providers are already using AI technologies like Predictive Analytics, Voice Recognition, among others, according to a joint research conducted by the National Business Research Institute and Narrative Science.
Banking on Artificial Intelligence
Artificial Intelligence is the future of banking as it brings the power of advanced data analytics to combat fraudulent transactions and improve compliance. AI algorithm accomplishes anti-money laundering activities in few seconds, which otherwise take hours and days. AI also enables banks to manage huge volumes of data at record speed to derive valuable insights from it. Features such as AI bots, digital payment advisers and biometric fraud detection mechanisms lead to higher quality of services to a wider customer base. All this translates to increased revenue, reduced costs and boost in profits.
Enhanced customer experience
Based on past interactions, AI develops a better understanding of customers and their behavior. This enables banks to customize financial products and services by adding personalized features and intuitive interactions to deliver meaningful customer engagement and build strong relationships with its customers.
With its power to predict future scenarios by analyzing past behaviors, AI helps banks predict future outcomes and trends. This helps banks to identify fraud, detect anti-money laundering pattern and make customer recommendations. Money launderers, through a series of actions, portray that the source of their illegal money is legal. With its power of Machine Learning and Cognition, AI identifies these hidden actions and helps save millions for banks.
Every day, huge quantities of digital transactions take place as users pay bills, withdraw money, deposit checks, and do a lot more via apps or online accounts. Thus, there is an increasing need for the banking sector to ramp up its cybersecurity and fraud detection efforts. This is when artificial intelligence in banking comes to play. AI can help banks improve the security of online finance, track the loopholes in their systems, and minimize risks. AI along with machine learning can easily identify fraudulent activities and alert customers as well as banks.
Banks have started incorporating AI-based systems to make more informed, safer, and profitable loan and credit decisions. Currently, many banks are still too confined to the use of credit history, credit scores, and customer references to determine the creditworthiness of an individual or company.
Customers are constantly looking for a better experience and convenience. AI technology reduces the time taken to record Know Your Customer (KYC) information and eliminate errors. Additionally, new products and financial offers can be released on time.
External global factors such as currency fluctuations, natural disasters, or political unrest have serious impacts on banking and financial industries. During such volatile times, it’s crucial to take business decisions extra cautiously. AI-driven analytics can give a reasonably clear picture of what is to come and help you stay prepared and make timely decisions. AI also helps find risky applications by evaluating the probability of a client failing to pay back a loan. It predicts this future behavior by analyzing past behavioral patterns and smartphone data.
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