Across industries and enterprises, AI has been the key growth driver, and this is mainly due to the services offered under this technology umbrella. Every industry is now witnessing enhancements in business processes, costs, and efficiency due to AI's introduction in their field. Depending on the industry, AI offers something unique and has helped the key decision-makers to make fast and accurate decisions based on various implementation solutions.
Talking particularly about the financial sector, the insurance industry has already deployed AI in their domain. An online report states that 54% of insurance firms have started adopting AI technology in their key business processes; however, about 34% of banking & financial enterprises have started adopting the technology. By adopting AI to the fullest, enterprises must understand where and how AI can be implemented to gain maximum benefits.
The financial services sector offers a huge potential for AI as there is a huge volume of data generated by the BFSI Industry. With such huge data, there are numerous opportunities to gain insights and carry out the required data analysis. AI can be used to examine the data fetched to it and come up with results that can be used to create new opportunities and understand the modern-day scenario.
With the growing adoption of digital technologies, the banking sector is now offering services through digital means. The digitalized services have resulted in an increased number of online transactions and growth in customer numbers that are gaining benefits from the digital initiatives. CX or customer experience is one such area that can be improved using AI for quick support and can be easily provided to the customer. Customer experience with AI can be used for offering customized banking solutions as per his requirements.
How AI Benefits the Banking Sector
The following are some common ways in which the banking sector is going to transform itself post the introduction of AI-
The financial and banking sector has been on the receiving end of various frauds. According to McAfee's online report, scams taking place in the financial sector globally have caused substantial economic losses. However, with the changing landscape of technology, banks have started rapidly transforming themselves by adopting newer mechanisms to combat various threats and frauds. Big Data technology has an important role to play as it provides the banks with in-depth insights regarding customer data and behaviour patterns. Talking about the financial risk mitigation enabled by AI and new financial models will help bank identity fund flow analytics in real-time. Lastly, AI-enabled financial models can be of great help for discovering fraudulent transactions that can be stopped as soon as they are discovered.
Like other business verticals, it is becoming necessary for the banks to acquire new customers and offer them the services needed for improved customer support. People no longer tend to wait for long hours by visiting the bank branches to gain minor information on interest rates, loans, or services. All of these services are now made available on the bank's website, and customers can search for the relevant information in a minimum time. Chatbots have proved to be quite handy for various banks as these chatbots have resulted in increased customer satisfaction. People find it tedious to make a call/email the bank for any query in today's fast-paced life. Instead, they find it easy & convenient to make a converse with a chatbot on the bank's website. An efficient, systematic as well as accurate conversion results in enhanced customer service levels.
AI can be used to analyze various data and use this data; it can be used to obtain great insights on customer behaviour and preferences. Understanding customer requirements, AI can also serve customers better with the best banking products and solutions. Here, historical data has an integral role in revealing customers' buying patterns and providing them with the expected products.
With the adoption of new technology, there are always specific challenges that one faces. Talking particularly about the banking sector, it becomes essential for banks to be compliant with industry regulations and protect customers' private data. The AI technology can be clubbed with various technology algorithms for offering multiple layers of modern, robust security that can minimize any risk of tampering or damaging transactions.
With banks gearing up for AI, they wish to overcome the traditional methods that are being followed. AI can be of great help for the banking sector as it can contribute to modern-day transformation resulting in enhanced overall financial industry growth.