Article By Lucas Bianchi, Co-Founder Namaste Credit
Developers of AI want to replicate the human mind. And wherever possible, improve on its limitations. In its simplest form, AI simply brings machine speed and consistency to human functions. In an advanced form, AI programs can become self-aware and work independently requiring no input or supervision by humans.
For the imaginative, AI in banking probably means a robot like a creature dispensing cash at the teller counter. Well, we are not yet there but could very well be, in the not so distant future.
The financial institutions are amongst the earliest adopters of AI and continue to drive imaginative use of this path-breaking technology. Not surprisingly there is a scramble to embrace AI in internal or customer-facing operations. A 2017 survey by Greenwich Associates, leading financial analysts found that the majority of financial institutions have either implemented Artificial Intelligence in their framework or plan to do so within the next two years.
Today, when financial services are being digitized via mobile wallets, payment apps and unified payment interfaces, AI-driven financial services are not merely technology enabled window dressing to existing banking processes; rather a forklift elevation of customer experiences, saving time and money for all. Yet, AI remains a buzzword that are thrown widely into conversations but are rarely used in actual products. Some critical areas where AI is being successfully integrated into key financial operations today are:
Elevating Customer Experiences – AI is being used in most simple customer-facing interactions for large banks, such as telephonic helplines and chatbots. By providing prompt and intuitive responses to queries 24×7, they help build brand affinity. Some advanced chatbots are trained to offer a dynamic and personalized service, given an almost human touch to an otherwise script is driven helpline service.
Empowering Banking Backend – Financial institutions have slowly started using AI to automate critical workflows, analyze payment patterns, strengthen AML (anti-money-laundering) protocols, detect fraud and underwrite credit.
Simplifying Financial Processes – AI is being used to simplify the process for new loan application on-boarding and approval. AI trained Video CAMs enables higher quality image to capture much more quickly by untrained users.
Improving Interpretations – Machine learning is being used to enhance correctness of interpretation (first time wrong = correct= second time right). This greatly enhances the lender or credit assessor’s ability to perform correct and deeper analytics on borrower data.
On the business side, AI-driven applications are helping differentiate and level the playing field for new age technology driven players. AI is now firmly integrated into all arms of the financial sector creating a multibillion-dollar industry where the new institutional infrastructure is supported by fin-tech companies who drive innovation and direction within the sector. The blurring of lines between the world of finance and technology has led all financial services to be available to a wider cross-section of the society especially through the Internet and mobile access.
Consumers can look forward to having ‘financial concierges’ for privatized financial advice, ‘Robo-Advisors’ (complex algorithms) to manage investment portfolios and intuitive security systems to protect their information.
Institutions, meanwhile, will likely use AI driven ‘Virtual Reality’ and ‘Augmented Reality’ to drive functions like client profiling and targeted behaviour based marketing. Algorithmic training will enable computers to conduct complex, high-frequency equity trading, predict market trends, and monitor program driver performance.
AI will slowly and steadily impact the whole financial services ecosystem in time to come. Companies and consumers alike will use the AI platform to elevate decision-making and change how banking, insurance, wealth management, and capital markets are experienced on a day to day basis. It will take time, money and energy but fintech companies are ready to help the entire ecosystem move away from legacy systems.