Artificial Intelligence (AI) is frequently hitting
headlines. It is slowly but consistently penetrating into various sectors to
control and drive their operations. The AI technology itself is getting better
day by day to help organizations to render personal touch to their products and
services. Precisely, as far as its adoption is concerned, AI is in a nascent
stage and its applications are going to make sweeping changes in organizations
in the coming years.
Given the nature of this column, let’s have a look at the
implementation of this artificial intelligence in the financial sector,
particularly in banks.
A survey “Innovation in Retail Banking” by Infosys Finacle
has found that banks and financial services organizations were by far the
biggest investors in AI technologies with an average investment of $14.6
million. Most of these investment dollars are currently going into
cybersecurity, data analytics, open banking and cloud—the key enablers for AI
technologies such as machine/deep learning, automation, natural language
processing and natural language generation.
Banking industry is confronted with lot of issues on
customer services’ front. One of the main problems is the lack of awareness
among the customers about the banking practices. Even as banks have system in
place to educate their customers, the functioning of these systems are
traditional in nature which fail to attract the attention of customers. It’s
here artificial intelligence tools come into play to transform customer
We have popular conversational agents such as chat bots or
voice bots which are able to read, process and understand text/speech. This AI
application has been adopted by many banks and used to handle customer queries
automatically. This has removed the intervention of human capital and at the
same time increased customer satisfaction due to consistent and quick service.
This smart virtual agent perform day to day tasks at the
operational front and helps customers transact, pay bills, deposit or transfer
money, and track savings. Interestingly, some banks use these bots to analyze
complex legal contracts. If the current level of integrating newer technologies
into the operations by banks is taken into account, chat/voice bots are going
to be common at bank branches to act as most dependable financial consultants.
AI technology has given expert systems which the financial
service providers leverage to guide their customers in wealth management
business. The AI application can help potential investors choose the right
product for their portfolio, and give insights on price fluctuations in the
future. These systems work alongside managers at the operational front,
collecting information and recommend actions.
Then we have Robots acting as ambassadors of AI applications in the banking industry.They
are enabled to perform a series of services to the bank customers.
Traditionally, the services are provided
by the staff posted at operational front. Now, this AI product – Robot –
has relieved them of those responsibilities. Interestingly, the Robots are wise
enough to even recommend a suitable product to a customer when asked about it.
Frauds in banks have been increasing alarmingly despite
having systems and procedures in place to check the frauds. There are AI
applications for fraud management. These applications analyse patterns in real
time to spot suspicious transactions and also help in risk mitigation. These
are few popular examples of AI which some banks have been leveraging to improve
their overall efficiency and to provide value added customer service.
While looking at the current scenario of banking industry in
the country, we find the sector going
through a phase of stiff challenges. Surging bad loan scenario coupled with
huge frauds committed by some of the ‘Who is Who’ have shook the financial
stability of the industry leaving many banks with broken backbone. Amid this
scenario, investing in AI technologies, which is inevitable, is challenging.
The task is more difficult for traditional banks as new
competitors like payments banks have emerged on the scene with AI applications
to render services to the customers with innovative business models. A scenario is in the offing when extensive
use of AI platform would be a norm and customers won’t go to a bank. It would
be the competition in AI applications that would make the banks competitive.
Loyalty or disloyalty of customers would depend upon the intensity of the power
of artificial intelligence applications used by the banks.
Once this dramatic change happens and takes permanent shape
in the service delivery mechanism of banks, there would also be an impact on
the employees. Virtual employees will slowly replace redundant employees in the
banking sector. However, it would be interesting to watch innovation of products
and services in the banking sector once artificial intelligence makes a clean
sweep of the sector.
(The views are of the author and not that of the institution
he works for)