How Artificial intelligence (AI) is redefining the financial services landscape

Nov 01, 2018 | 9 months ago | Read Time: 3 minutes | By CA Sandeep Vinod Kanoi

Artificial intelligence (AI) is poised to let loose the next wave of digital disruption, and business organizations must keep themselves prepared for it now. It’s been seen already the real-life benefits for the early adopting firms, making it critical for others to fast-track their digital transformations. Artificial Intelligence is one of the most puffed up technologies today. AI has shown various practical applications for several industries which includes banking and insurance sector.

How AI is helping banks and other financial institutions

Most of the organizations in financial services are trying to leverage Artificial intelligence for creating well-connected and powerful customer journeys. For an example, as the customer gets into a bank, the AI-enabled facial recognition system in the bank identifies the customer in a matter of few seconds. AI reveals information like customer’s recent financial transactions or spending patterns. Artificial intelligence also helps the bank in discovering that the individual has been frequently traveling to Europe for business, and uses his credit card generously. The bank could use all this information for recommending it’s new, multi-currency credit card to this customer.

One major way Artificial intelligence has disrupted the financial services landscape is via chatbots. A number of tech firms are offering powerful bots based on AI for top banks and SMEs which are customized for their own use. For instance, some of the banks today AI powered chat assistant which assists customers like a regular bank representative answering most of the basic queries with respect to financial products offered by the bank.  The potential of AI for banks could be leveraged by the fact that it could handle more than 10,000 enquires a second.

Several banks have already started using AI for driving customer centricity via chatbot-driven and automated personalized interactions. Hyper-customization is the core idea behind the customer centricity. Every individual need is different and unique. Customizing products for every customer is the ultimate objective.

Top global players in the banking industry are capitalizing on several new-age technologies such as Robotic Process Automation and Intelligent Process Automation.

Efficient cost management improved operations and focus on profitability

Today, the banking sector is facing a stiff and significant pressure on their bottom line. The regulators and their emphasis on transparency have brought a lot of pressure on businesses making them unprofitable. While the financial services firms continue seeking new products and new customers, it’s absolutely imperious that they stay profitable. This is where Artificial intelligence pitches in. AI technologies are allowing banks to bring efficiency into their cost-management and business operations.

Areas where AI investments are expected to happen

  • A persistent focus on the customer centricity –retaining old and acquiring new customers, providing a holistic experience to their customers and offering innovative products,
  • Improving operations with a core focus on cost management and ultimately profitability
  • Surveillance, fraud detection, and risk management
  • Claims management and underwriting which are specific to the insurance sector

Finally

We’re at the commencement of a journey which would require some time to unfold. Financial services industry would be one of the key sectors which would forge new commercial applications for Artificial intelligence in years to come. Companies that are able to balance the interests of their stakeholders would produce significant benefits for consumers and business.

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