The financial sector is undergoing rapid change, and external catalysts are outpacing its current business model. Financial services organisations have been forced to re-evaluate their future projections as a result of blockchain, artificial intelligence (AI) and mobile payments. According to business executives, technology, particularly AI, is increasingly being used to close gaps in the range of financial services available. Using AI, activities may be completed more quickly and inexpensively and also change the way businesses interact with customers.
The recently published whitepaper by NetApp, titled, ‘An AI infrastructure you can bank on’ stated, “Experts estimate that AI could generate more than $1 trillion in value for the banking industry by 2030.” Financial services are undoubtedly undergoing a significant transformation with technologies like voice assistants, chatbots, process automation, and predictive analytics.
Most financial services organisations are turning to AI as consumer preferences change. “Bank branches are closing faster than ever, and some experts believe banking may become 100 percent digital by 2035,” noted the whitepaper. As the banking sector is moving towards digital and hopping into the future, AI plays one of the most critical roles in it. There are various reasons for AI being called the future of digital banking and some of those are as follows:
Fraud detection
By rapidly identifying anomalous activity in an account and minimising the need for human involvement, security teams equipped with AI can prevent credit card fraud. Machine learning and deep learning are capable of analysing a wide range of data types, including voice data from banking contact centres, real-time structured and unstructured data from smartphones (including natural language processing), transaction history data from banks, etc. With the implementation of AI, a fraud investigator may concentrate on the warnings that are most likely to be fraudulent rather than overlooking all the cases. AI may also be used to detect and stop insurance fraud concerning loss claims.
Customer service
When the pandemic hit, bank visits became outdated. Today, customers expect services that will offer convenience and unique experiences. A requirement that can be addressed with AI (especially chatbots). Chatbot helps users create accounts, sign up for services, and resolve problems. The services are also quicker and hassle-free.
Creditworthiness assessment
Financial institutions are governed by a number of macro and microeconomic variables, many of which put them at increased risk. As the main business of the banking sector is to lend money, it is important to objectify the process in an efficient and quick method. To analyse the creditworthiness of a customer, without human intervention, AI is utilised to swiftly create choices based on income and credit history.
Product innovation
AI aids banks to automate activities that lower risk and boost efficiency with the use of chatbots. This results in increased client happiness and decreased turnover. “Contactless payment” or mobile payment solutions are powered by AI. Multiple components in transactions, including authentication and access, computer vision, inventory tracking, and back-end software are simultaneously powered by it.
AI recommender systems also present the customer with relevant alternatives (for best-suited credit cards, loans etc).
Market predictions
To predict how investors will respond, AI swiftly and precisely examines earnings, call transcripts and conducts a sentiment analysis.
Though there are major benefits to implementing AI infrastructure in a banking organisation, traditional approaches to AI involve slow architectures that silo analytics, training, and inference workloads. This approach creates complexity, drives up costs, and constrains speed to scale.
As data volumes continue to increase, companies are forced to modernise their infrastructure to be able to gather, interpret, and present massive quantities of data for real-time AI to make the best use of it. It is also important to ensure that the financial data is always available in the right place at the right time to fuel transformation.
To learn more on the keys to a successful data infrastructure that sparks innovation and drives revenue, check out the NetApp whitepaper.
