Technology, particularly artificial intelligence, is shaking the banking industry. Here's how AI eliminates overdraft fees, offers guidance on wealth management, and removes privacy threats.
FERMONT, CA: Banking sees a wide opportunity to get dramatically reshaped by advanced technologies such as Artificial Intelligence (AI). Banks will greatly benefit from using AI by creating better customer experiences and offering personalized financial advice, automating the process and administrative work, and reducing their internal costs. Here are some exciting ways in which AI can change the way banks operate, prevent overdraft fees, and reduce cybersecurity risks.
Avoiding Overdraft with AI-powered Banking
Customers frequently see the need to create an automated savings plan but are afraid to do so when an unexpected charge arises and leads to an overdraft. With AI, such a situation can be mitigated. Through measures such as forward cash flow forecasts and aggregated account data, banks can hold transfers to the automated savings account until there is more money in the account, alert the customer of a possible overdraft and suggest a top-up, or take other steps to avoid penalties.
Personalized Wealth Management Advice
According to the report of JD Power's Retail Banking Advice, 78 percent of customers need their bank's financial advice and guidance. But, in fact, only 28 percent of consumers thought they were getting advice. Customers are always looking for advice on retirement, savings, monitoring expenses, and saving opportunities. AI lets consumers with everything from increased spending warnings to future transaction notifications take control of their finances. Nearly every major bank actively uses AI and big data to help clients track their expenses and receive personalized reports as well as advice on how to save more, pay due bills, avoid penalties, and better manage their personal finances.
Preventing Cybersecurity Risks
Every year, fraud costs billions of dollars to banks and customers. If AI and Machine Learning (ML) could crackdown on the problem of fraud and cybersecurity in banking, it will help both customers and banks. Banks must build systems that can use profound intelligence and ML to identify a customer's unique form of a transaction better. The trick is to understand more accurately and intuitively, so as not to inconvenience customers by flagging too many non-fraudulent charges. In the fight against online fraud and cybercrime, advances in ML and deep neural pathways open new frontiers.
Improving Personalized Customer Experiences
Sadly, when digital took over the world, and the customer's comfort became the top priority of all successful businesses, banks remained relatively cold and distant. The average client still knows very little about the mysterious bank rules, terms and conditions, contingencies, and everything else going on inside a bank. AI and big data can improve this. It can help banks create a much more customer-friendly atmosphere and provide an excellent digital banking experience for their customers. For example, banks are now introducing technologies that analyze the spending habits of customers and gain insights into their banking behavior.
How smart algorithms can be built and how much AI and big data can be accomplished is hard not to be surprised. Nevertheless, with the pace at which everything goes digital, it is crucial that banks also go hi-tech and use technology such as AI, big data, and predictive analytics to improve, enhance, and secure banking.