In the large number of activities that surround us, artificial intelligence is a technological innovation that is still in its initial stage to be adopted by the various economic sectors. But it is also a fact that AI is technical innovation and artificial intelligence development that are being adopted by different sectors. For information banking operations it is one of the main institutions that are rapidly being enabled with artificial intelligence functions.
It is the digital form of intelligent technology that can learn on its own just like the human brain without much human intervention. In other words, it is designed to act as an automatic problem-solving and decision-making tool. Therefore, it is an intelligent form of the digital brain that learns over a period of time just like humans. Furthermore, it is not limited to the limits of a biological brain, but rather exceeds capabilities that are not biologically possible.
Role of artificial intelligence in banking operations:
1. Cost reduction
Maintaining the cost of banking operations with the maintenance of quality services is one of the main objectives of banking institutions. Artificial intelligence serves as an important tool to reduce cost in banks. Robotic automation that insights into data using AI creates amazing results in banking operations, as well as in the financial industry, on a regular basis. Periodic and repeated tasks are handed over to the automated process staffed by ai solutions for banking, while the human resource is used in higher level activities that save time and money to the banking organization. AI with high computational process can monitor customer data in real time and shows phenomenal results in decision making. Therefore, in this way, you keep costs and investments low to obtain the maximum profit margin.
2. Risk management
Banking is the type of sector that deals with consistent factors in the evolution of risk. Especially in credit facilities, the risk factor becomes a very obvious element and must be handled with care when servicing credit services. In other words, we can say that the risk in the banking sector is the lack of payment of the credit by the client within the agreed term. The longer it takes to pay, the risk of converting it to unprofitable assets (NPA) also increases. With the help of artificial intelligence, we can track the credit-obtaining history of individuals or organizations and assess the ability to repay money. Therefore, by using AI, we can see a significantly lower risk percentage when granting credit or loans to clients.
3. Customer experience
The level of customer experience has greatly improved with the inclusion of innovative technology such as artificial intelligence in the banking sector. Smart features like personal assistants, chatbots, personalized offers, etc. in banking applications, as well as on websites, they provide satisfactory results in serving their customers. By analyzing the nature of customer spending, transactions, savings pattern, etc., the banking institution serves the customer with personalized offers that alleviate the customer experience.
With the Internet revolution around the world, especially in Asian countries, digitization has become a game-changing factor for various industries. And the banking sector is no different from that conversion process. Since there are still people who do not have the small luxury of having a bank account. With the inclusion of artificial intelligence and machine learning, this problem is being solved in today’s age. Now users can open a digital bank account using KYC done digitally without physically appearing at the bank branch. This solves a number of financial problems for people who live far from the branch or do not have the facilities to get there. Therefore, with modern innovations like artificial intelligence, a user can sign up for online banking services.
Every year we receive reports of financial fraud or scams by people that cost financial institutions millions. According to a recent popular report, about 47% of banking institutions face fraud. There are certain loopholes in the banking system that are exploited by scammers or hackers to commit financial crimes. To solve this problem, machine learning analytics are used to protect the digital banking infrastructure. Using state-of-the-art machine learning technology with AI, it detects suspicious transactions from legitimate transactions and protects the banking ecosystem. Security features such as two-factor authentication, biometrics, OTP (one-time password) verification, etc. add an extra layer of security that protects people’s money. Therefore, the use of artificial intelligence technology banks strengthens security.