Artificial intelligence is expected to help the finance industry save nearly $1 trillion by 2030 according to a finance report.
A few global banks have already introduced artificial intelligence in their operations. Recently, commerz bank announced its plans to introduce artificial intelligence in its operations.
Artificial intelligence is regarded as a solution to money laundering, fraud, and even terrorist activity. It has emerged as an effective solution for banks to boost their revenue and cut costs.
However, banks aren’t using artificial intelligence for improving their processes but they are using the technology to interact with customers.
So are we entering an era of autonomous banking?
It seems so. The application of artificial intelligence has resulted in changes across the global financial services industry that can improve service quality with the help of bots. The industry is using bots to cater to customers, be it for trading or money transfers. As long as banks ensure that experiences exceed human capabilities and earn the trust of customers, these technologies will be helpful. The ultimate test for banks, however, is can consumers tell if they are being served by a bot.
Top five use cases of AI in financial services
- Artificial intelligence to improve customer experience
Chatbots and virtual assistants are common now. Gartner predicts by 2020, chatbots will handle more than 85% customer interactions.
Instead of talking to a human at a call center, customers find themselves engaging with a chatbot that mimics human agents and helps them manage their transactions.
Bank of America recently launched Erica – a chatbot that sends notifications to customers about their bank balance and suggests ways to save money and pay their bills. Artificial intelligence has also proven itself useful in creating more meaningful and personalized customer experience with fingerprint and voice recognition.
The use of artificial intelligence and other new technologies comes with security risks. However, banks have weighed up the benefits of seamless customer experience.
- AI to combat cyber crimes
Worldwide banks spend 5 billion euros to combat financial crimes. The use of artificial intelligence will reduce this crime in real-time. HSBC recently announced its plans to introduce bots that will spot money laundering, fraud, and terrorist financial transactions. The technology will compare customer and transaction data against publicly held data to spot suspicious activity.
- Artificial intelligence for improving efficiency
Machine learning enables software applications to process large amounts of data at a high speed.
The use of machine learning can benefit the investment banking industry and retail banks by improving efficiency, resulting in increased customer satisfaction, faster process delivery, and better marketing.
JP Morgan Chase, for instance, spent 360,000 hours to analyze legal documents. With the introduction of a new platform to extract data points from legal documents, now takes the bank a few seconds. Commerz bank is exploring a similar way to write analyst reports using artificial intelligence.
- Artificial intelligence for money transfers
Barclays Bank is developing a device similar to Amazon Echo which users can talk to and gather necessary information related to transactions. Ultimately, users will be able to make money transfers using the device. The bank is also planning to launch apps to extend more services to users.
- Artificial intelligence to automate trading
AI is helping banks to increase productivity of banking professionals by automating processes.
UBS last year announced an AI system that would help traders perform better. This was implemented after the bank analyzed the processes used by the traders that could be automated.
The retail and investment banking industry is undergoing a massive transformation, thanks to technology and changing customer behavior toward technology and data. A recent report found that 22% of banking executives believe that AI will improve the user experience by increasing personalization. At the same time, artificial intelligence also puts sensitive customer data at risks and banks must handle it with care.