bankingciooutlook

6 Ways Cognitive Technology Skyrockets Banking

By Banking CIO Outlook | Monday, September 30, 2019

Banks are backed with tech-savvy fintech players in the digital era, and emerging intelligent tech developments are sure to revolutionize banking.     

FERMONT, CA: The banking industry is booming the implementation of digital technologies, perhaps more than any other sector, to enhance its business processes. And this entanglement of technology and industry continues with the introduction of cognitive technology. Cognitive technology is a new avenue for cost control through cognitive tooling and automation with distinctive optimization possibilities. Cognitive technology generally relates to systems that use Artificial intelligence and signal processing to imitate logical human potential. These self-learning systems use a range of information, predictive analytics, and natural language processing. Cognitive technology makes banking and financing more productive while also providing an excellent customer experience by assisting in the following ways.

Investment Consulting

Banks are delving deeper into AI by utilizing smart systems to help make investment decisions and support their investment banking research. As humans are still in the loop with all the investment decisions, the AI systems and cognitive technologies are uncovering additional opportunities through better modeling and discovery. Through personalization, chatbots and Robo advisers are providing high-quality guidance on investment decisions and customer assistance. Using cognitive systems, banks can quickly investigate the recent market changes through investor data sources, calculate hazards and constraints, and receive suggestions that consider private profiles of clients. Therefore, banks can provide up-to-date advice to companies.

Improved Underwriting Procedures

Cognitive techniques enhance the underwriting of loans, which require transparency and trust in making informed decisions. By using artificial intelligence, both clients and credit counselors can obtain extensive data on whether or not someone is eligible for a loan. Cognitive techniques make it possible to consolidate private information from multiple sources into a single client profile, decreasing the time required for studies and analysis.

Regulatory Compliance

Banking is one of the economy's highest-regulated industries. Governments use their regulatory power to ensure that banks have acceptable risk profiles to ensure that banking clients do not use banks to commit financial crimes such as fraud and money laundering. Banks must comply to myriad regulations requiring them to know their customers, avoid money laundering, maintain customer privacy, monitor wire transfers, and adhere to a stack of additional regulations. Compliance with banking regulations has substantial costs and even higher liability if not followed. Therefore, banks are looking to smart AI assistants to keep an eye on customer behaviors, monitor transactions, and audit and log information to various compliance and regulatory systems. AI-based systems are helping the banks to stay on top of the regulatory compliance by looking at customer behaviors and patterns instead of specific rules while mitigating overall risk.

Broad Market Analysis

Banking sectors are using tools such as big data analytics and machine learning to conduct broad market analysis and individual client assessment to identify pain points and expectations. Most of the existing tools, however, are unable to capture all the data that is available both on the internet and in the organization’s internal data warehouses. That's because most analytics tools can't make sense of unstructured data, which makes up most of all the information produced through sources such as social media and customer care communications in natural language. With the help of advanced natural language processing, cognitive technology can enable businesses to gather insights from such sources and make decisions based on highly detailed information.

Chatbots

Chatbots for customer care is becoming an increasingly ubiquitous feature of banking websites. These chatbot applications minimize the need for the involvement of human executives in minor cases. Only instances involving some degree of complexity will be escalated to the managers of customer care. Using cognitive computing in the websites and mobile apps of financial organizations will enhance their functionality and allow them to solve complicated queries with precise data. These chatbots can comprehend any request typed in natural language and can transform to understand the customer's natural language the required data from the organization's database. A chatbot powered by cognitive computing, for example, can explain to a customer about why a transaction takes longer than usual and also answer follow-up questions by quickly drawing the required information from the right sources. 

Enhanced Security and Identity Management

Cognitive computing can enable banks and other financial institutions to use more robust yet flexible safety systems. This will minimize the danger of illicit transactions, identity theft, leakage of data, and maximizing the ease of lawful operations. Banks frequently use rigorous multi-step safety processes to check customer identity while providing them with desirable services. But, this can often make the process inconvenient for clients. Using cognitive computing-driven safety systems, banks, and financial institutions can balance safety strengths against illicit organizations with the comfort of lawful clients access. Cognitive computing can evaluate customer behavior variables such as their usual transaction methods, the typical recipients, average transactions with distinct recipients, average monthly expenditures, and other relevant details. 

There are countless advantages of cognitive banking. AI and cognitive technologies will continue to transform the sector. For banks, it is crucial to lay the right database, embrace the right technology, and determine how maximum benefits can be achieved. Banks that holistically adopt cognitive computing are likely to reap maximum advantages.

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