AI in Banking: Can Banks Meet the Challenge?
Technology is improving the overall quality of our lives and increasing the pace of progress that we register in every sphere. Artificial Intelligence (AI) is a new tech buzzword. AI is taking over the hard, repetitive work that has been dragging productivity of companies. This is enabling humans to focus on more critical aspects of the job, such as formulating creative strategies to expand and grow the business. The potential of AI is immense, and it is being used in ways that are quite unimaginable across the business landscape.
AI is now a natural fit for banks, and it can drive down costs and improve customer experience
AI has made inroads in the financial sector and is completely reshaping banks’ approach. AI is altering and remoulding the way traditional banks work. The Covid-19 pandemic accelerated AI adoption within the banking sector. AI is now a natural fit for banks, and it can drive down costs and improve customer experience.
As per research by Business Insider, AI could save an estimated US$447 billion by 2023 if they switch to the AI banking system. Enforcing AI in the banking sector reduces the time consumed by bankers on digitizing, discovering and onboarding document templates. It minimizes the rate of error and reduces the document digitization cost, which accounts for over hundreds of millions of dollars for a single department.
Digitization and Automation in Back-Office Processing
As Covid-19 retreats and the world opens once again, there are new normals that have been set across various facets of life. Technological advances, such as AI and Machine Learning (ML), will continue to drive automation into businesses and feed processes and engagements that will deliver new levels of efficiency with products that are tailored to business outcomes and individual customer preferences.
Leveraging AI becomes necessary to drive customer demands
Organizations have had to recalibrate themselves to ensure they remain relevant in the changing times. Through automation, organizations can significantly reduce the need for repetitive and labour-intensive tasks and allow employees to focus on more strategic tasks and perform them accurately, cost-effectively, and more efficiently.
Understanding Consumers – Not Just Customer Support
AI offers a more proactive customer experience by automating back-end processes to reduce human error. Today, banks are piloting AI use cases and are providing easy solutions to customers such as employee onboarding, KYC, fraud detection, and easy loan applications. Customers expect faster, personal and meaningful services from banks. Hence, leveraging AI becomes necessary to drive customer demands.
Controlling Risks and Fraud Detection
Technology continues to be the most important factor when it comes to protecting and safeguarding records in banks. Banks need to safeguard customer assets and their transactions, and it is necessary for them to handle all the documents properly. The digital world is continuously under fear of the ever-evolving risk of digital fraud, making it more important to integrate technology that is fool-proof and easy on the finances.
As per a research report by Juniper, cybercrime currently costs the global economy approximately USD $600 billion (0.8% of global GDP) annually, out of which online transaction fraud accounts for the biggest chunk – this is expected to hit US$25.6 billion by 2020. Hence, banks today are adopting a multi-layered defence system for a balanced strategy for effective fraud detection. The technology has proven to be extremely dependable to tackle issues like money laundering.
Tech-savvy consumers expect banks to deliver seamless transaction processes, and adopting AI not only allows banks to build hyper-personalized banking and detect fraud and money laundering but also improves employee and overall business productivity.
Guest contributor Raj N is a serial entrepreneur, angel investor, and Founder of Zaggle, an award-winning fintech company that uses deep tech and AI to provide platform solutions to businesses for expense management and employee reimbursements as well as for rewards and recognition.