How artificial intelligence (AI) services are transforming banking
Artificial intelligence (AI) is entering the mainstream at different paces for different industries. The insurance industry has so far outpaced the banking and asset management industries in terms of how frequently they use AI services to make important business decisions. While 54 percent of insurance companies are already using AI for these purposes, only 34 percent of banking institutions are doing the same.
But banking’s adoption of AI is projected to grow rapidly over the next few years. According to a survey from Narrative Science, 32 percent of financial institutions are using AI technologies for multiple banking purposes, and more than half of non-adopters plan to embrace AI by the end of 2018.
The applications of AI in banking will be varied and transformative for the industry. Here are a few of the most common ways consumers will see banks using artificial intelligence in the near future:
Real-time fraud detection
When it comes to detecting fraud, banks need to be able to identify patterns and behaviors that likely signal fraudulent behavior. Sophisticated criminals have tactics for covering their tracks and slowing down detection until they’re able to make a clean getaway, but AI services are much more effective at detecting patterns and fraudulent behavior.
According to The Financial Brand, AI is capable of detecting fraud in real-time, and it can even predict how that fraudulent behavior will progress over time, allowing the bank to stop the fraud and track down the perpetrator. Faster response times will also deter future attempts, lowering costs for the bank and protecting its financial assets.
Chatbots for customer service
Consumers are familiar with chatbots as a customer service solution, and they are already being used by businesses in other sectors. Banks plan to use AI-powered chatbots to provide fast, responsive service that more effectively serves the needs and expectations of customers.
With an AI-powered chatbot, banks can process and resolve customer queries and complaints faster, and less time spent on hold will be required to process requests. Business Insider reports that these chatbots will be used to assist in wealth management services, loan underwriting, customer analytics, fraud detection and other critical banking services.
Enhanced banking products
Because artificial intelligence is able to process and understand data at an incredible scale, it’s able to mine insights that guide banking strategy and better serve customers. This will result in AI helping to identify better banking products and services to offer consumers. This can include the development of new savings or investment accounts, loan products and other banking solutions.
Meanwhile, customer-facing AI will be used to make personalized recommendations to customers, connecting them with banking products that serve their unique needs and goals.
Improved transaction security through AI services
When it comes to adopting new technologies for banking, extra considerations and vetting must be used to ensure the banks remain in compliance with industry regulations and to guarantee that they’re able to protect their customers from loses due to fraud and other security breaches — particularly during transactions.
Eventually, this transaction security will pair blockchain technology with AI-powered algorithms that provide multiple layers of modern, robust security to bank transactions, dramatically reducing the risk of tampering and other security interference that could otherwise result in lost assets. As CSO notes, this will ultimately result in banks being able to offer stronger transaction security than ever before.
Many banks are already in the process of adopting AI and building it into their customer experience. Expect to see AI’s role in banking become increasingly visible over the next few years.