The banking industry has struggled to realize profitability for a couple of years not less than ten. With Artificial Intelligence being in the picture lately, there is a lot of hope that is being felt and that things might take a huge turn. There is an expected increase in productivity and profitability if Artificial Intelligence and banking merge. The banking industry often finds itself in a difficult situation whenever Artificial Intelligence is thought of.
What is Artificial Intelligence and why does the banking industry need it? Artificial Intelligence (AI) is a field in Computer Science that has allowed the creation of machines and computers that simulate the human intelligence. These tasks include voice recognition, problem-solving, a better forecast of decisions and learning. These are systems that work like humans or even better and that tends to worry many people. However, the banking industry needs such systems in the organization’s most fundamental pillars. Let’s look at the areas that are set to benefit from this marriage.
Customer support: AI will make the customer experience more personalized by the use of aids such as Chatbot which is a virtual customer care systems. Instead of having customer support who for example will need to ask questions to identify whether a caller is who he/she claims to be, AI can be able to recognize speech and can already tell more about the caller before he even explains himself. AI can manage real-time data within a short period and is therefore very applicablefor profiling customers.
Fraud Prevention: Technology has enabled AI machines and computers to be developed in a way that they can be able to detect a unique pattern which sometimes is unusual and suspicious. This specific aspect is a key to stopping fraudulent activities. Things like terrorist funding or cases of money laundering and other suspicious transactions are easily noticed and the violators can be traced. AI systems can be able to handle data that may take human a huge amount of time to process.
Autonomous banking: With the simulation of human tasks like speech recognition, banks can implement AI while doing sensitive transactions that might not only be personal but also for different organizations like, government transactions and militaries financial transactions. This means that the transactions can only be transacted by only one person and that assures optimum security.
Trading:AI machines can be programmed to notice repeat patterns. This is important in the trading sector since they can spot similar patterns and use that data to produce statistically calculated forecasts. These machines and computers can, therefore, predict the best logical patterns through simulation. This, in turn, leads to better decisions and also in a timely manner. AI can therefore be useful for its exponentially smart decision-making abilities. It can be useful for studying and predicting the numerous data in stock markets to produce the best results.
Lending: When it comes to all the forms of paperwork from previous bank statements to current income and other factors considered by lenders for estimating the amount of loan a customer qualifies for, AI really eases all that burden. There are smart applications that have been developed with the ability to collect unstructured data from customers and analyze it to come up with the best loan packages for different customers with different needs.
Wallets: Companies with a global market like, Apple, e-Bay, Amazon, Google have all come up with a cashless system that allows clients to shop with ease on the internet like never before. These companies have come up with their unique payment systems that are fast, secure and easy to use unlike using cheques. This has made them realize even more productivity and profitability at the end. This shows that the banking industry is already benefiting from AI.
Faster and timely decisions: Data-driven AI systems have been developed to manipulate data and come up with the best financial forecast before making financial decisions. This is done by the system simulating processes that simulate response that a real human would do and you, therefore, end up with a realistic, cognitiveand almost accurate prediction.A lot of time is saved on managing numerous data and it’s also profitable since you’ll cut expenses that could have been incurred if it was to be manually done.
Digitalization: As technology is evolving it will be evident that banks will no longer need to have very many branch lines. Most of the things will only require a computer system that allows customers to quickly make their requests for fast service back instead of the long old queues waiting to be served by few tellers.
Most people think that incorporating AI in banking will cause massive job loses for mostly tellers and customer support but that’s one way of looking at things. This is a tie between wins and loses. This is also an opportunity to create employment for all sorts of position be it back end or front end. These are people that design, maintain and even at times explaining to financial managers how certain decisions that could take time to decide are made faster by use of good data management systems. However if AI is fully implemented in banking, it has been predicted that the organizations will experience management of more bots and fewer people.This, in turn, will bring about increased productivity and more profit to the organizations.
AI is seriously needed in banking but for everyone to benefit from this merger, we would need a more strategic approach that has to put a lot of factors into consideration. These systems have been around and they have been tested but they have not yet been implemented. Is it because of the fear of massive job losses or is it fear of the AI systems failing and unlike humans how can you fire a programmed machine in case it isn’t competent considering you already fired al your tellers and customer support? Should the system surpass our intelligence, we have more to gain than to lose if the right strategies are applied. The only true way to feel the real impact of this merge is by implementing it.