OVERVIEW OF AI IN BANKING
AI in banking is not a new name. Banking is always looking for automation with less human interaction to avoid errors. Like ATM invention make a cash withdrawal and deposit fast and safe. Cards remove the physical cash. Mobile banking and net banking make banking a smooth task.
What is Artificial intelligence in banking?
Chatbots, IVR, Online banking modules, machine assistance, and robotics are used to make banking accurate, fast and safe. When to control this technology, special computer software with self-decision power is used; this concept is known as AI in banking.
Why do we need AI in banking?
- A bank needs to deal with a massive number of users’ queries daily.
- Many processes, regulations, cash, and human mind interactions make banking a game of fire.
- After digital disruption, banking combines the old and latest technology.
- After Fintech hits the market, the banks are under pressure to complete. Fintech does need not carry a cash flow balance, whereas banks have to manage cash flow balance. This means Fintech does not need to carry physical cash, but the bank needs to. So, the expenditure limits of banks are limited. Plus, government regulations are stricter for banks rather than Fintech.
- A digital disruption is a great option for banks, but to go through and manage digital banking, high cash flow is required.
- It is not possible to find out such human power which has banking and technical knowledge both at the same time. A single human error can make a huge loss.
- Here comes the saviour, Artificial intelligence. Artificial intelligence is a process that makes this technology self-managed and advanced. AI can work 24 X 7, give 100% accuracy and safety. It can handle users’ queries, give a proper response, and resolve them.
Why banks prefer AI over humans
- 24 X 7 availability
- Real-time processing
- Self-learning and logical data-based decision making
- Error-free environment
- Works beyond human edges
- Helps to understand the customers better
- Enhanced customer experience
- Can predict future outcomes and trends
- Cognitive process automation
- Reduction in operational costs and risk
- Fraud detection
- Risk management
- Physical and digital wealth supervision
- Fast process for anti-money laundering (AML) activities
- Financial and non-financial regulatory compliance
- Accurate KYC regulatory
- A fast credit check or eligibility calculation
- Reduction in human error
Modes of AI in Banking
- Net banking and Mobile banking
- AI Chat Bots
Net banking and Mobile banking
- AI helps users to do banking activities online.
- Also, AI reads, observes, and stores the user’s data, actions, and time spent on the app.
- AI uses this information to determine users’ likes and show them the appropriate result.
AI Chat Bots
- A chatbot (chatterbot) is a software application.
- These chatbots can interact with users with an online chat conversation via text or voice calls.
- These feel similar to human representatives.
- These are specific software or embedded devices which work like a human.
- Like ATM is used to withdraw and submit the amount.
- OTP generation, transaction control, etc., are the tasks managed by robotics in banking.
Banking is a challenging task. It’s a wise act to use AI in its operation, which reduces human error and improvise security and accuracy.