- Improved Customer Experience
AI technology is transforming the banking industry, providing customers with improved
experiences and convenience. It reduces the time taken to record KYC information,
eliminates errors, and automates eligibility for facilities like personal loans and credit. AI-
based software can reduce approval times for loan disbursement and accurately
capture client information to set up accounts without any error, ensuring a smooth
experience for customers.
Moreover, AI in banking helps provide improved customer support, offering banking
services even on public holidays. This helps to ensure maximum customer retention
rates and adds value to the brand. With AI, banks can provide the right services at the
right time, enhancing the overall customer experience.
- Personalized Banking Experience
Personalization is key
.in the banking industry, where customer experience matters. Banks use AI to gather
and process customer data to provide personalized recommendations, offers, and
financial advice. This approach helps banks stand out in a standardized market.
Prescriptive personalization uses historical data to create optimized workflows. In
contrast, real-time personalization incorporates historical and real-time data for
personalized recommendations and customized virtual assistants based on natural
language processing models. AI-fueled personalized virtual assistants build trust and
activate users while reducing their effort.
Personalized video assistants collect interactive data for further customization or
improvements. By utilizing AI for personalization, banks can better understand
customers, creating long-term relationships and increasing market success. - Wealth management
In today’s banking industry, customized plans have become a trend, which benefits the
banks by increasing their customer base and offers users the ability to manage their
wealth efficiently with personalized inputs and advice on risk and investment plans.
With the advancements in AI technology, the banking sector can take advantage of AI-
led customer service to meet front-office standards. However, implementing AI-led
services can be challenging, especially in countries where diverse language sets are
prevalent.
Nonetheless, AI can significantly help in portfolio management, risk analysis, and
providing investment advice to customers.
- Effective Data Collection & Analysis
Banking and finance institutions have to handle millions of transactions daily, generating
an enormous amount of data that needs to be collected and recorded accurately.
Unfortunately, this task can be overwhelming for employees, and errors can creep in
during the process.
This is where AI-based innovative solutions can help by streamlining data collection and
analysis. This improves the overall user experience, and the data can also be used
to detect fraud and make credit decisions.
These insights are invaluable to financial institutions that need to stay ahead of the
game in a rapidly evolving landscape. - Chatbots
Chatbots are a prime example of how artificial intelligence revolutionizes the banking
industry. With 24/7 availability, they can serve customers around the clock, which is
especially beneficial for those needing assistance outside regular business hours.
What’s more, chatbots are constantly learning about customer usage patterns, allowing
them to understand and meet the needs of individual users efficiently. By integrating
chatbots into banking apps, banks can provide personalized customer support and
recommend financial services and products that fit their customer’s unique needs.
A great example of an AI chatbot in banking is Erica, a virtual assistant from the Bank of
America. Erica can handle tasks like reducing credit card debt and updating card
security. Erica managed over 50 million client requests in 2019, making her a trusted
and efficient assistant for Bank of America customers.
- Fraud Detection and Cybersecurity
Artificial intelligence (AI) and machine learning are crucial tools in the banking sector to
improve online security, detect fraudulent activities, and reduce risks. With the ability to
analyze vast amounts of data, AI algorithms can easily detect unusual patterns and flag
suspicious transactions for further investigation, leading to a safer and more secure
online experience for customers.
For instance, Denmark’s largest bank, Danske Bank, replaced its outdated rules-based
fraud detection system with a deep learning algorithm, resulting in a 50% increase in
fraud detection capability and a 60% reduction in false positives. The new system also
automated crucial decisions while routing some cases to human analysts for further
inspection.
Moreover, AI can help banks manage cyber threats, as the financial sector was
the most-targeted industry for cyber attacks in 2019, accounting for 29% of all attacks.
With continuous monitoring capabilities, AI in financial services can help banks respond
to potential cyber-attacks before they affect employees, customers, or internal systems.
While blockchain technology has become a popular solution for fraud prevention due to
its transparency and immutability, financial firms still need machine learning-based tools
to detect fraud successfully. Banks can incorporate unsupervised algorithms into their
systems for fraud detection, which can identify unusual patterns and speed up the
review process.
Investing in these technologies will provide customers with a safer and more secure
online experience.
- Risk Management
In today’s globalized world, banking, and financial industries face several external
factors that can significantly impact their operations. From natural disasters to political
unrest and currency fluctuations, these factors can create a volatile environment where
business decisions can be challenging. That’s where AI-driven analytics comes in.
By leveraging advanced algorithms, businesses can gain insights into future trends and
potential risks, allowing them to make better-informed decisions.
One area where AI is particularly useful is in evaluating loan applications. By analyzing
past behavioural patterns and smartphone data, AI algorithms can predict the likelihood
that a borrower will default on a loan. - Loan Assessment & Credit Scoring
Banks are adopting AI-based systems to make more informed, secure, and profitable
decisions regarding loans and credit. Traditionally, banks have relied heavily on credit
history, credit scores, and customer references to assess creditworthiness, but these
methods are often flawed and can misclassify creditors.
Fortunately, AI is changing the game by analyzing customer behaviour and patterns
to determine creditworthiness for those with limited credit history. AI-based systems
also warn banks about specific behaviours that may increase the chances of default,
allowing them to make more accurate risk assessments.
At Syndell, we develop AI-based banking mobile applications that allow customers to
apply for loans, credit cards, and checkbooks easily.
- Regulatory Compliance
Banking is a heavily regulated economy sector worldwide, as governments seek to
prevent financial crimes and large-scale defaults. This means banks must have
acceptable risk profiles and comply with ever-changing compliance regulations.
To manage these challenges, banks often maintain internal compliance teams.
However, these teams can be time-consuming and costly to manage manually.
AI uses deep learning and natural language processing (NLP) to read and analyze new
compliance requirements for financial institutions. While AI banking can’t replace
compliance analysts, it can make their operations faster and more efficient.
By tracking regulatory changes and ensuring compliance with laws and regulations, AI
can improve decision-making processes and help banks stay up-to-date with constantly
evolving compliance requirements.
- Predictive Analytics
Have you ever wondered how AI can help your business grow? One of AI’s most
common use cases includes general-purpose semantic and natural language
applications and broadly applied predictive analytics.
AI can detect specific patterns and correlations in the data, which traditional technology
could not previously detect. With AI, businesses can now uncover patterns that indicate
untapped sales opportunities, cross-sell opportunities, or even metrics around
operational data, leading to a direct revenue impact.
But that’s not all. AI can also use historical data to predict customer behaviour and
market trends and identify potential risks and opportunities. By analyzing this data,
businesses can make informed decisions about their marketing strategies and sales
approaches.
This technology can take your business to the next level by providing insights that may
have been overlooked. So, why not try AI and see how it can improve your business?
- Process Automation
Artificial intelligence is transforming the banking industry using Robotic Process
Automation (RPA) algorithms to automate repetitive tasks and increase operational
efficiency. RPA allows for the automation of up to 80% of repetitive work processes,
freeing up time for knowledge workers to focus on value-added operations that require
human intervention.
RPA bots can issue numerous invoices instantaneously, schedule their sending, review
payments, secure billing, and streamline collections. Natural Language Processing
(NLP) enables bots to extract information and capture knowledge from documents,
facilitating application processing and decision-making. - Voice Recognition
AI-powered voice assistants are becoming increasingly popular in the banking industry
as they offer a convenient and hands-free way for customers to perform various banking
tasks. With the help of voice assistants, customers can check their account balances,
make transactions, pay bills, and even get answers to their banking-related queries, all
by simply using their voice commands.
Voice assistants use natural language processing (NLP) technology to accurately
understand and interpret customer requests. They offer a secure way to perform
banking transactions, as customers can authenticate themselves using their voice.
With biometric authentication like voice recognition, customers can be confident that
their transactions are secure and protected from unauthorized access.
They benefit customers and banking institutions by reducing their workload on customer
service representatives, increasing customer satisfaction, and enhancing the overall
customer experience.
As technology evolves, AI-powered voice assistants will become an integral part of the
banking industry, transforming how we interact with our banks.
- Security And Authentication
Facial recognition is a form of biometric authentication that uses AI algorithms to
analyze unique facial features to identify an individual. Banks can use this technology to
verify the identity of customers when opening an account, accessing their account
information, or conducting financial transactions.
Facial recognition provides a more secure and convenient banking experience for
customers, eliminating the need to remember complex passwords or worry about
personal information being stolen. Moreover, facial recognition can also prevent
fraud by detecting attempts by criminals to impersonate a customer using stolen
personal information.
Using biometric authentication is a game-changer for the banking industry, as it offers a
secure and reliable method of verifying customer identity. As technology continues to
evolve, we expect to see more advanced forms of biometric authentication implemented
in the banking industry to provide customers with a safer and more convenient banking
experience.
