Artificial intelligence in Banking advantages, disadvantages & Mobile banking services
AI can be used in banks to decrease financial risk, It can improve loan underwriting through machine learning, improve financial crime risk with advanced fraud detection, It can improve compliance and controls, and reduce operational risk through improved accuracy in transcription & production of documents, banks can use machine learning and big data to prevent criminal activities and monitor potential threats to customers in commerce.
Artificial intelligence (AI) in Banking
Artificial intelligence (AI) includes machine learning and natural language, it can be used in the banking industry, Machine learning is a method of data analysis which automates analytical model building, Machine learning occurs when computers change their parameters/algorithms on exposure to new data without humans having to reprogram them.
Natural language processing (NLP) refers to the ability of technology to use human communication, naturally spoken or written, as an input that prompts computer activity, natural language generation (NLG) refers to the ability for technology to produce human quality prose, It sorts through large amounts of available data to produce a human-sounding response, NLG can take the form of speech, or of a multipage report summarizing financial results.
Benefits of AI for Banking Sector
AI can help the bank understand the expenditure pattern of the customer, The bank can come up with a customized investment plan & assist the customers for budgeting, banks can send the notification about the advice for keeping a check on the expenses and investments based on the data, The transactional & other data sources can be tracked to help understand the customer’s behavior and preferences to improve their experience.
Artificial intelligent can sift through massive amounts of data and identify patterns that might elude human observers, One area where this capacity is particularly relevant is in fraud prevention, Artificial intelligence and machine learning solutions are deployed by many financial service providers to detect fraud in real time.
The online banking and mobile banking become increasingly popular as a tool for 24/7 transaction, AI enables Banks to access customer data, such as detailed demographics, website analytics & records of online and offline transactions, machine learning can integrate & analyze information.
Risk assessment process while giving loans requires both accuracy & confidentiality, It is a very complex & critical process, Artificial intelligence can handle & simplify this process by analyzing relevant data of the prospective borrower, Artificial intelligence can combine & analyze data related to the latest transactions, market trends, and the most recent financial activities to identify the potential risks in giving the loan.
Banks must be bankable for presenting secure & swift transactions, Artificial intelligence is designed to detect the fraud in the transactions on the basis of a pre-defined set of rules, the mobile app can detect any suspicious activity in the customer’s account on the basis of behavior analysis, any online transaction of a huge amount from the customer’s account which has a history of small transactions can be detected instantly.
Artificial intelligence plays a vital role in protecting personal data, As we witness a rapid rise in the instances of cybercrimes, AI-based fraud detection can prevent such attempts, So, for the banking and finance sector, AI has a tremendous scope in the domain of cybersecurity, The mobile app development services can detect the issue of fraud & data breach for the banks.
Hedge fund trading & management can be done on the move with the help of AI-based mobile app solutions for the banking sector, AI-related tools can fetch real-time data from various financial markets across the world, AI models can analyze different financial markets, so, AI models can assist the users to take decisions quickly.
AI can offer high security to the banking sector, AI-based mobile applications can make the transaction quicker & safer, The bank and financial institutions can understand the user’s behavior and offer personalized experience through an app, Banks handle customer-oriented operations easily while reducing the cost of hiring additional employees.
Artificial intelligence can shift tasks from humans to AI, so, it can reduce costs, it can speed up response time, keep humans apprised of the latest regulatory changes, and save time by preparing reports, The Bank has computer programs that carry out repetitive tasks ranging from automated programs to respond to data requests from external auditors.
Artificial intelligence improves employee effectiveness and enhances customer experience through targeted emails and other offers, It increases revenue, It increases the productivity of sales reps, AI offers greater precision & accuracy, From cash transfer to bills payment, cards management, and other support, AI can enrich the satisfaction level of your customers, All of these operations can be easily managed through desktops, smartphones, and other mobile devices.
Artificial intelligence can use analytics in banks, it can test vast quantities of data to search for patterns, groupings, and correlations, Machine learning can improve processes such as fraud detection, risk modeling, biometric identification or credit underwriting.
Most leading banks have already added virtual assistants to their instant website chatbots, voice response systems, and mobile applications, Artificial Intelligence considers each interaction as a teachable moment, so the chatbots (virtual assistants) keeps getting better while understanding customers, With AI, virtual assistants can deliver better customer support.
Artificial intelligence can detect the factors involved in frauds & support investigators, It improves financial security with advanced fraud prevention, Artificial Intelligence works as a real-time scam solution for the banking sector while handling complex situations, AI can detect fraud by flagging unusual transactions, It feeds back into the consumer’s profile which subsequently builds a secure environment.
AI can complete many tasks through complex automation, resulting in better productivity, Based on a machine learning algorithm, AI can quickly consume and process a massive amount of data at an expedited level, The enormous speed brings efficiency to financial services, providing scope for personalized offerings to consumers, AI makes faster decisions while carrying out actions quickly.
The finance industry is harnessing machine learning to lower operational costs & drive profitability, This field involves both front-and back-office activities across multiple institutions, Machine learning algorithms can analyze thousands of data points in real time and flag suspicious or plain-right fraudulent transactions, stopping many fraudulent claims in the process.
Artificial intelligence increase efficiency, accuracy, and speed of mathematical calculations, it can handle large quantities of data, banks can find the best combination of the initial margin reducing trades at a given time based on the degree of initial margin reduction in the past under different combinations of those trades.
Disadvantages of AI for Banking Sector
The production & maintenance of artificial intelligence requires high costs as they are very complex machines, AI consists of advanced software programs that require regular updates to meet the needs of the changing environment, In the case of critical failures, the procedure to reinstate the system and recover lost codes may require enormous time & cost.
Although Artificial Intelligence can learn & improve, it still can’t make judgment calls, Humans can take individual circumstances and judgment calls into account when making decisions, something that AI might never be able to do, Replacing adaptive human behavior with AI may cause irrational behavior within ecosystems of humans & things.
AI can offer a lot of power to the few individuals who are controlling it, so, AI carries the risk and takes control away from humans while dehumanizing actions in several ways, Artificial Intelligence delivered to wrong hands can turn out to be a serious threat to humankind, If individuals start thinking destructively, they can generate havoc with these advanced machines.
Artificial intelligence allows you to replace the workforce with machines that can lead to wide-reaching unemployment, if the use of AI becomes rampant, people will be highly dependent on the machines & lose their creative power, Be it banking or any other sector, AI can increase the unemployment rate, Individuals with nothing to do can lead to the devastating use of their minds.