Artificial Intelligence has been profoundly impactful due to the fact of its inception in many enterprises, MNCs’, which also includes the banking sector, which operates and delivers good quality services to customers. The emergence of artificial intelligence in banking applications and services has made it even more consumer-oriented.
Artificial Intelligence-based systems are becoming a helping hand to banking sectors by diminishing the cost by enhancing efficiency, quick decision-making, and problem-solving based on cryptic knowledge. Also, its magnificent algorithms detect fraudulent patterns in microseconds. Few reports have shown that there is a potential growth of A. I in banking sectors by $1 trillion, which signifies that banking sectors are swiftly migrating towards seeking security from Artificial Intelligence.
What kind of implementations of AI are provided in banking and finance?
Artificial Intelligence has become an indispensable part of the world, seeking new advancements in technology, and organizations including banks have already taken initiatives to their advantage in the products and services they provide.
The implementation of Artificial Intelligence in banks and financial institutions is listed below:
- Fraud Detection and Security Framework: The foremost compliance any banking sector needs as several transactions occur on a daily basis as consumers pay bills, withdraw money, and check deposits by physical means or more likely via applications online services. AI helps to detect patterns, identify fraudulent activities, track loopholes, finding out vulnerabilities, risk mitigation, and enhance the security layers in online financial services.
- Loan and Credit-based judgments: Banks have started uniting the Ai based systems as they are profoundly safer and profitable in loan and credit decision-making. Many banks are bounded to utilize the credit history, score, and consumer choice of preference for their trustworthiness for their organization. Moreover, one can never deny the old credit reporting systems are brainteasers with many errors, missing real-world transactions, and also miscategorizing the credits. In such a scenario, AI-based systems help to analyze consumer behavior and patterns of consumer credit history to ascertain credit trustworthiness. It also sends alerts and warnings on the detection of misbehavior that may lead to an increase in default.
- Monitoring Market Trends: AI-ML-trained models assists in the surveillance of market trends to process large amounts of data and predict the market trends. Advanced techniques and algorithms assist to evaluate the market, and decision-making in investment. Leading to providing suggestions for investment in stocks, sending alerts, and warning of potential risks.
- Chatbots: Chatbots are one of the best idealogy in practical terms based on AI in banking and finance. How do chatbots help in banking? On deployment they work is feasible to work 24*7 fixing the non-working hours. In addition, they keep fetching knowledge from databases about the customer’s behavior patterns, which helps in understanding the users’ effectiveness. Moreover, uniting AI chatbots and the banking sector will improve work efficiency, 24*7 availability, customer service availability with high work effectiveness, and less workload on different service parts such as emails, etc.
- Customer Experience: Customers who seek better service and integrate AI which leads to the level of consumer satisfaction, it also reduces the customer taken record on Know your Customer (KYC) information and eliminated errors.
- Risk analysis and mitigation: AI systems help in many ways to reduce cost-effectiveness, and send alerts in advance in email phishing attacks can be prevented as it filters data using LLM(large language model) before they reach out to the end users’ inboxes and skeptical patterns detection, keywords, grammatical styling, link source, etc.
In conclusion, by understanding and utilizing the power of AI in the banking sector, financial institutions more effectively improve customer services, security framework, and risk management, and most importantly reduce the effect of potential risk, and regulatory compliance. AI helps to reduce the risk by sorting out the overwhelming processed data volume, assuring the accuracy of data, and exterminating the potential risks and threats. However, the world, banking, and finance might be swiftly migrating towards it, it’s advisable to use Artificial Intelligence-based systems wisely as they can be used in both ways to prevent attacks and threats and also to cause attacks by using AI-based systems.
Author: Sakshi Ankush Dhanawade Intern, Policy and Advocacy