In the world of technology, Artificial intelligence or as the hot new buzzword calls it, AI is the rising star. Artificial intelligence is the go-to technology for almost all the companies around the world. Now, if artificial intelligence is the hot subject on media and people around the world are talking about it, then there must be something about it that we need to know and understand. In this article we will discuss about Artificial intelligence and banking, how it is especially used in the banking sector, the application and the scope of artificial intelligence in banking. To begin with, let us understand the meaning of artificial intelligence.
Artificial Intelligence – All You Need to Know
As the name suggests, Artificial Intelligence is the ability to copy from something that is natural, in terms of acquiring and applying knowledge and skills. Now this ability of copying is done by a machine or a computer. So, when a machine mimics a human mind by thinking for itself, it is known as Artificial Intelligence. The computers are designed in such a way that they can perform many activities. Some of these activities are – Learning, Speech recognition, Perception, Planning, Reasoning, Problem solving and also the ability to operate and move objects around. Hence, AI focuses attention on creating intelligent machines that operate and react like human beings. In today’s modern world, all of us in some way or the other do make use Artificial intelligence, be it on our cellular phones or computers.
The Role of Banking Industry
Banks play a very important role in the development of financial life of modern society. It is considered as the life blood of today’s world economy because it handles cash, credits and other financial transactions. Banks help customers to track their expenditures over savings and motivates them to save money and earn interest for a safe future. This encouragement in turn helps the banks to provide financial assistance to the growth of big industries. Since, the banking industry plays such a major role in the development of world’s economy it is very important that each and every financial transaction done through the banks must be properly documented. To do this, the banks primarily use computers, where they have a detailed record in their databases. Some of the various channels that banks use for their operations are through ATM’s, mails, telephone banking, online banking and mobile banking. It is mind boggling to know that the entire banking system is so well connected that each and every transaction can be tracked and any exchange of information can be done from any part of the world just by connecting to these networks. This smooth operation of the banking world that is done through computers and networks is possible only because banks use Artificial intelligence.
Artificial Intelligence in Banking Sector
The most essential part of this industry is Artificial Intelligence in banking. It has a profound impact when the machine learning in banking industry can interact with humans by making decisions and in a convincing way encourage customers. The main aim of having Artificial Intelligence in the banking industry is to get insight into the customers preferences, to ensure that the customers are happy with the services provided by the banks and help the customers understand their expectations from the banks.
Benefits of Artificial Intelligence in Banking
Today the banking industry uses Artificial Intelligence in many ways to shape the world of banking life.
Customer satisfaction is the first and the foremost important factor of any bank around the world. The banks provide personalized and more efficient services to each and every individual customer. Artificial intelligence helps in increasing revenue, faster decision making and having a good customer relationship. Having Artificial intelligence not only ensures that the customers are happy but it also helps the banks to maintain and have a well organized back office.
Bot is the short form of Robot, and so chatbot is an automated chat program that is either run automatically or follows a pre-determined path. Chatbot is a way of using Artificial Intelligence in the form of robotics in banking. This tool is very helpful in the banking industry because people are so caught up in their daily jobs that it becomes very difficult for them to be physically present at the bank. Most often it happens that when people are free, the banks are closed or it is a weekend and during late hours’ banks don’t work. Money can be required at anytime and at any place and this is where chatbots come handy as they are available 24/7. Chatbots are a smart way of providing efficient customer service. It helps customers know their transaction details and also additional services that they are eligible to receive. Through the use of chatbots, banks are able to understand each customer’s requirements and give them the right offers or even reward them.
Banking related fraud is one of the most fearful concerns among people and the banking industry. Especially when a financial fraud occurs, the affected individual finds it very difficult to cope and recover from financial losses. However, the good news is that whenever there is a fraud transaction noticed in a bank statement and if it is immediately brought to the attention of the bank, then the bank authorities immediately step in and take necessary action to handle the incident in a very organized manner. This quick response from the bank has helped the costumers to build their trust with the bank as well as it helps the bank also to retain their loyal customers.
Now, this immediate action that the bank authorities are able to take is because of the use of Artificial intelligence in banking industry. Artificial Intelligence has enormous ability to detect and minimize banking fraud. The tool that is used for Artificial Intelligence gets smarter and smarter day by day, which in turn helps in powerful machine learning. One way it captures banking fraud is by scanning through the vast transactional data and tracking down any unorthodox activities or irregular behavior patterns. Hence with this smarter Artificial Intelligence, banks are able to detect fraud and protect security breaches.
The Future of Artificial Intelligence in Banking
Now that we have understood what Artificial Intelligence is and the benefits of Artificial Intelligence in banking, we will now look at the scope of Artificial Intelligence in the banking industry in the years to come. If we look at the development in the field of technology, we see that it is getting smarter every day, this gives us assurance that in the future, we can only see that technology of Artificial Intelligence going stronger and stronger, which will help any customer to have a secure banking experience. Let us look at some of the areas in which artificial intelligence will rule in the future.
Digitization is using the support of technology to transform data into a digital format. There are many advantages of using digitization in the banking industry
- Helps in enhancing customer experience
- Helps in saving time both for the customer as well as for the bank
- Helps in reducing human error
- Helps in building a strong and loyal customers
- Helps in the movement of large cash inflow and outflow
- Helps in dealing with cashless transactions from any place and at any time
Application of Artificial Intelligence in Banking:
When applications of Artificial Intelligence are installed in banks, they help in examining the data base effectively and make it easier for the banks to recommend, forecast and execute tailored financial advice to customers. Through these applications, it is possible to gain quick information on financial strategies, loan rates and the future market progress.
Personalized Financial Guidance:
Artificial Intelligence in finance will help customers to make easy and quick financial decisions. It will give up to date information on the current market structure as well as provide suggestions on stocks and bonds in which customers can invest.
The invention of digital wallets has helped in boosting the level of digital money to a much higher level. The best part of these wallets is that customers can purchase any item online either with a mobile phone or a computer and they can do this through cashless transactions.
Interactive voice response systems (IVRS):
This is an automated voice system that helps in interacting with customers and routing calls to appropriate banking departments. This voice assistance also helps in answering certain questions. This feature adds in giving a pleasant experience to customers with their banks.
To conclude, Artificial Intelligence is gaining popularity day by day and banks are exploring and implementing this technology in transforming the way customers are assisted. So, the future of Artificial Intelligence in banking sector is very bright and with the introduction of Artificial Intelligence, it makes it even easier for a customer to do transactions from any place and at any time without waiting in long queues at the bank. Hence, the aim of Artificial Intelligence is to provide personalized and high quality customer satisfaction along with efficient and time saving services.