Introducing artificial intelligence in your enterprise might sound like a new thing to do but AI in banking and financial services has been there for a long time. Payment companies have been using machine learning to detect and prevent fraudulent transactions and since the increases in computing power and storage capacities, these detections happen in real-time.
The reason behind this rapid development of AI’s use in this sector goes to the amount of data and banks have a lot of this data. This industry uses that huge amount of information available to surpass human capabilities and predict outcomes when there is a vast number of variables involved, profiting the business in many forms.
While some financial institutions have only applied this technology to increase their operational effectiveness, many have reaped its benefits by reducing operating costs and increasing their efficiency. Today we will be discussing the top benefits that banks and financial institutions are getting from the use of AI.
1. Investment Automation
A risky, untapped market for discovering new opportunities, many firms like UBS and ING have developed AI systems that automate investments. While it is constantly monitored by humans, this technology is unveiling new opportunities through better modelling.
2. Improved Fraud detection
It is unsurprising that AI is better at handling vast amounts of data and detecting frauds way before humans can. They can apply different algorithms, without making mistakes, to perform such repetitive tasks with ease. This is one of those benefits that banking and financial institutions are enjoying because of being an already data-heavy industry.
Recommended by LinkedIn
3. Improved Regulatory Compliance
Governments use their regulatory power to make sure that banks are avoiding high-scale defaults and that no customers are committing any financial crimes. Banks comply with certain regulations to make sure that illegal activity is taking place and this is where AI has been helping. By using smart AI virtual assistants, financial institutions are able to monitor transactions while keeping an eye on customer behaviours and various compliances and regulations. This helps them practice compliance while minimizing overall risk.
4. Automated Customer Service
Having a chatbot available 24/7 means that customers don’t need to worry about reaching the bank before closing time or on holidays or weekends. It also means that the well-documented chatbot can much more easily solve a customer's problem than an actual customer care agent. While chatbots are nothing new, integrating them inside the financial institution gives them an upper hand in handling many standard banking tasks that previously required human involvement.
5. Reduced operational costs
While the banking industry is mostly digital in its operations, some processes cannot be automated and require the help of humans. Banks can face high operational costs and risks due to human error. Such processes cannot be automated but the rule-based digital tasks that require human intervention can be coupled with other artificial intelligence techniques to achieve better results. For example, paperwork-heavy processes have the potential to become automated once natural language processing can viably process handwriting and processes through a rule-based method.
