Power of Artificial Intelligence

Artificial Intelligence (AI) is frequently hitting headlines. It is slowly but consistently penetrating into various sectors to control and drive their operations. The AI technology itself is getting better day by day to help organizations to render personal touch to their products and services. Precisely, as far as its adoption is concerned, AI is in a nascent stage and its applications are going to make sweeping changes in organizations in the coming years.

Given the nature of this column, let’s have a look at the implementation of this artificial intelligence in the financial sector, particularly in banks.

A survey “Innovation in Retail Banking” by Infosys Finacle has found that banks and financial services organizations were by far the biggest investors in AI technologies with an average investment of $14.6 million. Most of these investment dollars are currently going into cybersecurity, data analytics, open banking and cloud—the key enablers for AI technologies such as machine/deep learning, automation, natural language processing and natural language generation.

Banking industry is confronted with lot of issues on customer services’ front. One of the main problems is the lack of awareness among the customers about the banking practices. Even as banks have system in place to educate their customers, the functioning of these systems are traditional in nature which fail to attract the attention of customers. It’s here artificial intelligence tools come into play to transform customer service.

We have popular conversational agents such as chat bots or voice bots which are able to read, process and understand text/speech. This AI application has been adopted by many banks and used to handle customer queries automatically. This has removed the intervention of human capital and at the same time increased customer satisfaction due to consistent and quick service.

This smart virtual agent perform day to day tasks at the operational front and helps customers transact, pay bills, deposit or transfer money, and track savings. Interestingly, some banks use these bots to analyze complex legal contracts. If the current level of integrating newer technologies into the operations by banks is taken into account, chat/voice bots are going to be common at bank branches to act as most dependable financial consultants.

AI technology has given expert systems which the financial service providers leverage to guide their customers in wealth management business. The AI application can help potential investors choose the right product for their portfolio, and give insights on price fluctuations in the future. 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.They are 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 wise enough to even recommend a suitable product to a customer when asked about it.

Frauds in banks have been increasing alarmingly despite having systems and procedures in place to check the frauds. There are AI applications for fraud management. These applications analyse patterns in real time to spot suspicious transactions and also help in risk mitigation. These are few popular examples of AI which some banks have been leveraging to improve their overall efficiency and to provide value added customer service.

While looking at the current scenario of banking industry in the country, we find the sector  going through a phase of stiff challenges. Surging bad loan scenario coupled with huge frauds committed by some of the ‘Who is Who’ have shook the financial stability of the industry leaving many banks with broken backbone. Amid this scenario, investing in AI technologies, which is inevitable, is challenging.

The task is more difficult for traditional banks as new competitors like payments banks have emerged on the scene with AI applications to render services to the customers with innovative business models.  A scenario is in the offing when extensive use of AI platform would be a norm and customers won’t go to a bank. It would be the competition in AI applications that would make the banks competitive. Loyalty or disloyalty of customers would depend upon the intensity of the power of artificial intelligence applications used by the banks.

Once this dramatic change happens and takes permanent shape in the service delivery mechanism of banks, there would also be an impact on the employees. Virtual employees will slowly replace redundant employees in the banking sector. However, it would be interesting to watch innovation of products and services in the banking sector once artificial intelligence makes a clean sweep of the sector.

(The views are of the author and not that of the institution he works for)