Artificial Intelligence (AI) is frequently hittingheadlines. It is slowly but consistently penetrating into various sectors tocontrol and drive their operations. The AI technology itself is getting betterday by day to help organizations to render personal touch to their products andservices. Precisely, as far as its adoption is concerned, AI is in a nascentstage and its applications are going to make sweeping changes in organizationsin the coming years.
Given the nature of this column, let’s have a look at theimplementation of this artificial intelligence in the financial sector,particularly in banks.
A survey “Innovation in Retail Banking” by Infosys Finaclehas found that banks and financial services organizations were by far thebiggest investors in AI technologies with an average investment of $14.6million. Most of these investment dollars are currently going intocybersecurity, data analytics, open banking and cloud—the key enablers for AItechnologies such as machine/deep learning, automation, natural languageprocessing and natural language generation.
Banking industry is confronted with lot of issues oncustomer services’ front. One of the main problems is the lack of awarenessamong the customers about the banking practices. Even as banks have system inplace to educate their customers, the functioning of these systems aretraditional in nature which fail to attract the attention of customers. It’shere artificial intelligence tools come into play to transform customerservice.
We have popular conversational agents such as chat bots orvoice bots which are able to read, process and understand text/speech. This AIapplication has been adopted by many banks and used to handle customer queriesautomatically. This has removed the intervention of human capital and at thesame time increased customer satisfaction due to consistent and quick service.
This smart virtual agent perform day to day tasks at theoperational front and helps customers transact, pay bills, deposit or transfermoney, and track savings. Interestingly, some banks use these bots to analyzecomplex legal contracts. If the current level of integrating newer technologiesinto the operations by banks is taken into account, chat/voice bots are goingto be common at bank branches to act as most dependable financial consultants.
AI technology has given expert systems which the financialservice providers leverage to guide their customers in wealth managementbusiness. The AI application can help potential investors choose the rightproduct for their portfolio, and give insights on price fluctuations in thefuture. These systems work alongside managers at the operational front,collecting information and recommend actions.
Then we have Robots acting as ambassadors of AI applications in the banking industry.Theyare enabled to perform a series of services to the bank customers.Traditionally, the services are provided by the staff posted at operational front. Now, this AI product – Robot –has relieved them of those responsibilities. Interestingly, the Robots are wiseenough to even recommend a suitable product to a customer when asked about it.
Frauds in banks have been increasing alarmingly despitehaving systems and procedures in place to check the frauds. There are AIapplications for fraud management. These applications analyse patterns in realtime to spot suspicious transactions and also help in risk mitigation. Theseare few popular examples of AI which some banks have been leveraging to improvetheir overall efficiency and to provide value added customer service.
While looking at the current scenario of banking industry inthe country, we find the sector goingthrough a phase of stiff challenges. Surging bad loan scenario coupled withhuge frauds committed by some of the ‘Who is Who’ have shook the financialstability of the industry leaving many banks with broken backbone. Amid thisscenario, investing in AI technologies, which is inevitable, is challenging.
The task is more difficult for traditional banks as newcompetitors like payments banks have emerged on the scene with AI applicationsto render services to the customers with innovative business models. A scenario is in the offing when extensiveuse of AI platform would be a norm and customers won’t go to a bank. It wouldbe the competition in AI applications that would make the banks competitive.Loyalty or disloyalty of customers would depend upon the intensity of the powerof artificial intelligence applications used by the banks.
Once this dramatic change happens and takes permanent shapein the service delivery mechanism of banks, there would also be an impact onthe employees. Virtual employees will slowly replace redundant employees in thebanking sector. However, it would be interesting to watch innovation of productsand services in the banking sector once artificial intelligence makes a cleansweep of the sector.
(The views are of the author and not that of the institutionhe works for)