There has been a significant change in the banking industry due to the advancement of technologies such as Artificial Intelligence. Some of the banks and financial institutions have already tried AI, but the others are still trying to implement it in their system.
In a recent survey by Accenture, it was found that by the end of 2018 more than 37% of the consumers of the United States of America own a digital voice assistant gadget.
Hence, it is apparent how AI-based devices are making inroads into our daily life through various consumer products. It has a transformative effect in most of the consumer-related industries including banking.
With the help of Artificial Intelligence, computer systems can perform daily tasks without the intervention of humans. AI also helps in cutting down the repetitive tasks with ease. It makes banking operations hassle-free and the system impactful.
Here are some of the ways that Artificial Intelligence is disrupting the Banking Industry in 2019 and beyond:
1. Automation of Consumer Services
As the NLP, i.e., Natural Language Processing technology is evolving, it is tough to differentiate between the voice of bot and human representative. The chatbots developed are so intelligent that they can resolve any queries of customers without any involvement of humans.
There are several benefits of consumer service automation including a significant reduction in cost.
In a recent study, it was found that due to the use of AI in the banking and financial sector more than 1 million jobs would be cut resulting in the saving of $450 billion by the end of 2030.
Although there are various benefits of automated customer service, however banks, and other financial institutions should not heavily depend on them. They need to monitor them regularly to check if they are functioning correctly or not.
Instead of replacing humans, chatbots should work to make the business more efficient. If necessary, they should provide an option to speak to a human for finding better solutions.
Recently, a Switzerland based bank UBS which was ranked 35 in the list of 2018 global bank rankings by Accuity, partnered with Amazon to start a new service name “Ask UBS.”
In this, the customers and clients of the bank can enquire about the queries with the help of Alexa-powered Echo speaker devices. It also gives personalized advice based on the consumer’s investment and goals.
The company is aiming to make the service more secure and trustable for the customers and clients.
Almost all the banks have access to their customer’s information such as demographics, online and offline transaction records, analytics and others.
Gaining useful insights from the Introduction to Artificial Intelligence, banks can create personalized services and products based on the interactions and behavior of individual customers. The learnings will prove to be beneficial, enhancing your skills and abilities.
According to the global director of the software giant SAP, in the upcoming years, banks can start digital services such as setting and negotiating prices in real-time.
Personalized pricing may be used widely in the upcoming years; however, banks are already using AI-processed data to help their customers in making better investment decisions, based on their goals and previous records.
Security is the number one priority for any business, company or bank. Nowadays, most of the banks are replacing augment passwords and other types of customer verification with more secure methods including biometric data such as fingerprint and retina scan.
According to a report by Googe intelligence, by the end of 2020 banks will be using biometric verification for more than 1.9 billion consumers.
The U.K based bank Halifax provided a unique wristband to their customers which utilizes their heartbeat for verification purposes.
As of today most of the mobile phones use AI-powered facial-recognition technology to unlock as well as to validate payments and purchases.
In the upcoming years, biometric and facial-recognition technology will become more secure and sophisticated which will enable them to use in different industries.
4. Smart Wallets and Blockchain hastening payments
Digital wallets are considered the future of banking and real-world payment technologies. Almost all the major organizations in the world are developing their payment gateways to make the transfer of payments hassle-free.
Some of the major players in the digital wallet and payment industry are Google, PayPal, Apple, Samsung, and others. Smart Wallets helps in decreasing the need for physical cash which increases the reach of money at different levels.
In this era of digital revolution, consumers are going through a significant shift regarding buying and behavior preferences. Customers have more control and options to interact with the banks.
The rise of blockchain technology will remove all the slow payment processes, and consumers can make the transfer and payments in real-time. It will help in hastening the payment process, thereby increasing customer satisfaction and trust.
5. Fraud Detection
Fraud detection is one of the areas where the capacity of AI and automated systems are particularly relevant.
According to the computer security software company McAfee, more than $600 billion was lost globally due to the cybersecurity breaches which is equivalent to 0.8% of the global GDP.
Many financial institutions and banks are deploying AI and machine learning based solutions to detect security breaches in real-time.
For example, multinational financial services corporation Mastercard was able to reduce the rate of false decline by more than 80 percent with the help of AI technology.
There are many systems which are being used to eradicate fraudulent cases in commercial as well as personal banking.
Whenever the system detects any suspicious activity with your account, it automatically sends alerts and notifications to the concerned person.
With the help of machine learning, neural systems and artificial intelligence many instances of misrepresentation can be recognized at a significantly quicker rate.
6. Digitalization instead of branch
In the earlier days, almost every banking process was very lengthy including the long queues and sluggish response.
Even opening a bank account was a considered an arduous task as you had to go through several desks for account creation, document, and verification.
Artificial Intelligence and digitalization has created a comprehensive platform to connect the banking officials and customers which eases the whole banking process.
Now you can perform most of the task with just your mobile phone without actually visiting the branch. The technology empowers customers to use banking services with only their voice commands. It helps in reducing error and increasing the overall productivity and efficiency.
Artificial Intelligence is one of the most discussed topics, not just in the banking industry but for many other businesses. It has the potential to transform the entire banking industry; how it functions, processes and interacts with its customers.
With the introduction of robust AI systems and improved infrastructure, the banking industry now realizes its full potential.
Banks can better their client relationship, decrease the instances of illegal tax extortion, improve security and fraud detection.
To increase the overall productivity and efficiency of the banking industry, Artificial Intelligence in working on providing high-quality customer support, personalized experience, speed, and many more.
Danish Wadhwa is a strategic thinker and an IT Pro. With more than six years of experience in the digital marketing industry, he is more than a results-driven individual. He is well-versed in providing high-end technical support, optimizing sales and automating tools to stimulate productivity for businesses.