How Banks are Using AI to Boost Growth ?

When talking about AI, the sector which is going to get the most out of the technology is the banking sector. According to analysts, AI is going to end up saving more than $1 trillion in just a decade.

Even though artificial intelligence did not find much application in the banking sector in its initial days, the technology has become mature enough and is now ready to tackle the many traditional banking problems. Though the implementations depend on the size, type of financial institution and the location of the firm, however, the core concept remains the same.

Let us consider an example to understand the situation. Considering a large bank, which has a broad customer base and has to be successful at any cost, they can make use of chatbots to reduce the cost of operations and to provide immediate customer service.

Whereas, when taking into consideration a small financial institute or the ones in developing countries, they might be stuck on setting up the necessary infrastructure required to make effective use of the technology.

Listed below are some areas where financial institutions are making use of AI to provide enhanced services:

Law compliance and Fraud Detection

One of the main reasons why institutions incur a loss is because of money laundering and frauds. AI can help prevent fraudulent activity as well as help investigate and help track money. There are already several tools and systems in place which automatically conduct and compress data which takes hours of human labor in a matter of just a few minutes, according to Alex Hickey of CIO Dive.

Citibank is already using artificial intelligence to prevent criminal activities and keep a tab on potential threats. It has invested over $11 million to launch an application which is encouraging customers to participate in third-party services.

Automation

One of the key drivers of automation is process automation with RPA, continuously evolving into cognitive automation helping AI perform even more complex tasks. For example, fintech giant JPMorgan has invested in an upcoming technology called CIiN, which reviews documents and helps extract data compared to the time required by humans.

Working in a similar fashion, a product called the ICR (Intelligent Character Recognition) works on reading and extracting data from various fields like loan application, receipts and W-4 forms saving countless hours of human work which can instead be allocated to revenue-generating tasks.

Personalized Chatbots

This is the eye of the storm. Personalized Chatbots have popped up on various company radars in the past few years and the banking sector has been relentlessly using them to improve customer ex[perience and satisfaction.

For example, Bank of America, one of the largest banks in the world, has developed a chatbot of its own named Erica, which provides financial guidance for the bank clients using both voice and text. Since human interaction is completely redundant, the firm has been able to save up millions of dollars and provide uninterrupted service.

The financial sector has understood the importance of improved connectivity and interaction, with JPMorgan Chase and Wells Fargo introducing a mobile application called Finn and Greenhouse respectively. It was developed with the intention of improving customer interaction and to attract new clients, especially millennials.

While large institutions already know the importance of AI in everyday life, small and medium-sized companies are still struggling with the infrastructure and development phase. With every day passing by, everyone is finding some new way to integrate AI in their already setup infrastructures which is making everyone's life easier.