Artificial intelligence or AI has become a major disruptor in almost every industry over the recent years. The introduction of AI in diverse financial institutions has particularly made the sector more technologically relevant and customer-centric. Kavan Choksi underlines that AI based systems can be of a huge help to banks, and allow it to accelerate productivity and lower expenses. Intelligent algorithms additionally have the capability to spot fraudulent information in a matter of seconds.
Kavan Choksi marks some of the common ways AI is used in banking
Artificial intelligence is extensively used in the banking sector today. It makes banks more dependable, efficient, and trustworthy. In fact, AI is strengthening the competitive edge of modern banks in the digital era of today. The growing use and impact of AI in banking helps in reducing operational expenses, well as improves customer support and process automation.
Here are some of the major ways AI is used in banking:
- Cyber-security and fraud detection: An expansive number of digital transactions take place every day across the world. People nowadays withdraw or transfer money, pay bills, and does a lot more through their online accounts or banks. Hence, there is a growing need for banks to ramp up their cyber-security and fraud detection efforts. This is where AI can be of a huge help. Artificial intelligence can aid banks in significantly improve the security of online finance, minimize risks, as well as track the loopholes in their systems. AI along with machine learning or ML, can identify fraudulent activities with ease and alert customers as well as banks.
- Chatbots: Chatbots are undoubtedly among the best possible examples of artificial intelligence in banking. These bots can work 24×7 once deployed, unlike humans, who would have fixed working hours. Moreover, the chatbots keep learning about the usage patterns of each customer, which allows them to gain a good understanding of every user in a competent manner. By properly integrating chatbots into banking apps, financial institutions can make sure that they are available for customers around the clock. By properly understanding customer behavior, chatbots can competently deliver personalized customer support and recommend well suited financial services to every customer.
- Loan and credit decisions: A large number of banks have started to incorporate AI based systems to make more profitable, safer, and informed loan and credit decisions. An AI based credit and loan system can look into the patterns and behavior of customers who have limited credit history to determine their overall creditworthiness. The system may even send warnings to banks about any kind of behaviors that has the odds of increasing the risk of default. Basically, AI is a major technology that plays a vital role in changing the future of consumer lending.
- Tracking market trends: Artificial intelligence in the domain of banking helps financial institutions to process expansive volumes of data and subsequently predict the latest market trends. Advanced ML techniques are particularly useful in evaluating market sentiments and suggesting investment options.
As per Kavan Choksi, banks are in a race to become AI-first and for good reasons as well. The banking industry is steadily working on transforming itself from a people-centric business to a customer-centric one.