AI's Role in Transforming the Banking Sector

Banking CIO Outlook | Wednesday, April 10, 2019

Banking, Financial Services, and Insurance (BFSI) is one of the sectors that has had continuous technological disruption. Today, most of these changes are customer-oriented and aim to enrich the banking experience of the consumer. Statistics certainly point in the direction that AI will herald a change in the banking industry's transformation.

The integration of Artificial intelligence (AI)  into the dynamic banking and finance industry has several advantages. Some of these include accuracy, human error reduction, cost reductions, scalability, and many others. Data analysis is another important activity that is easy to carry out with AI.

Machine learning can process a large amount of data quickly and easily. Patterns can be observed, and customer service can be improved. With this data, it is easy to contact the right customer with the right product at the right time.

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Financial institutions are responsible for protecting their customers, and this is made possible by means of machine learning. Given the history of financial transactions of a customer, the amounts, location, time of the transaction, the payment of the merchant or seller constitutes an enormous amount of historical data. Algorithms for machine learning can classify whether the current transaction is fraudulent or not based on the historical transactions it can analyze and classify. Fraud detection will also be a quick and easy process, as AI can flag unusual transactions immediately. It builds confidence and creates a secure financial environment.

Financial institutions now use AI to provide a personalized experience for their customers. Today, consumer financial services are customized using machine learning algorithms that study financial data, financial habits, expenditure style, savings, and accurately predict a product that customers want. Consequently, customers can now choose what suits them. This is usually done through voice-enabled chatbots that are powered by natural language processing machine learning programs.

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