How did AI in the banking sector take a significant role after the COVID19 pandemic? Discuss AI technologies in banking.
Artificial Intelligence (AI) has been around the world. and it is the future of banking as it brings the power of advanced data analytics to combat fraudulent transactions and improve compliance. In this era of the digital economy, the banking sector cannot exist and operate without the various digital tools offered by the ever innovations happening in the field of Artificial Intelligence
After the pandemic hit the world, AI in the banking sector played a crucial role. the potential value of AI has grown significantly. AI in the banking sector to manage record-level high-speed data to receive valuable insights and detect biometric fraud, cyber attacks, and also leads to high-quality services to customers.AI is becoming increasingly important in banking organizations to their day-to-day operations. Artificial Intelligence is the future of banking as it brings the power of advanced data analytics to combat fraudulent transactions and improve compliance.AI algorithm accomplishes anti-money laundering activities. about 32% of banking services are already using AI technologies.
Here are the top hottest AI technologies in the banking sector:
Digital Account Opening :
Digital accounting opening (DAO) is the most popular technology. Digital account opening is a three-pronged process for opening a bank account remotely. This process fulfills three core functions Customer acquisition, Origination, Onboarding. With a DAO system in place, the returns will come fast. Banks that mainly rely on digital account opening have experienced 16% revenue growth year over year. from 39% to 46% plan to modify or enhance their existing DAO systems. In the early days, the design of DAO was ineffective, later redesigning the process to allow for the simplest account opening and funding possible—and then working on reducing risk and meeting regulations.
Customer service/Chatbot :
Chatbots deliver a very high return on investment in cost savings, making them one of the most commonly used applications of AI across industries. banking chatbots can effectively tackle most commonly accessed tasks, such as balance inquiry, accessing mini statements, fund transfers, etc. This helps reduce the load from other channels such as contact centers, internet banking, etc.
Person-to-Person (P2P) Payments :
P2P lending platforms bring borrowers and lenders together in a marketplace model where lenders can give money after analyzing the borrower profiles in the digital space. These payments allow the transfer of funds between two parties using their banking accounts or credit cards through an online or mobile app. now P2P payments are enhanced from 25% to 40%.
Robo Advice :
A Robo-advice is a digital financial advisor driven by artificial intelligence and automation. Automated advice is one of the most controversial topics in the financial services space. It takes a customer through a series of questions about their finances, investment experience, and risk appetite as well as their financial history. and give appropriate investment recommendations in a particular product class, bonds, and asset types.
Cloud Computing :
Cloud computing is the delivery of computing services – including software applications, data storage, etc. it is a destination for banks and other financial services firms to store data and applications and access advanced software applications via the internet. Already 40% of banking services are done with cloud computing. Cloud computing also allows new product development to move forward without capital investment.
Credit Scoring :
A credit score is an indicator of a person’s creditworthiness, or their ability to repay debt.AI is instrumental in helping alternate lenders determine the creditworthiness of clients by analyzing data from a wide range of traditional and non-traditional data sources. It is usually expressed as a number based on the person’s repayment history and credit files across different loan types and credit institutions
Video marketing strategies are just new techniques applied to create a commercial space and buy things without researching and strategizing. Video Marketing is helpful for the banking sector due to the widening of the online banking sector. Video Marketing Trends will ultimately boost your financial services within your budget and in your timelines. Video Marketing/collaboration has undoubtedly become crucial for marketers across all industries.
The primary purpose of Cybersecurity in digital banking is to protect the customer’s assets. AI can significantly improve the effectiveness of cybersecurity systems by leveraging data from previous threats. To prevent breaches, banks need to implement a cyber risk management plan that protects their network against all breach attempts and ensures financial security for their customers.
Application Programming Interface (API) :
APIs are software that acts as an intermediary between other pieces of software. APIs play a crucial role in the Banking as a Service industry.APIs will become central to the competitive dynamics of the industry. Banks must rapidly assess fintechs’ offerings, integrate them, and deploy them to their customer base.APIs allow fintech companies to offer these products and services and seamlessly integrate them into the bank’s existing systems.
General Purpose / Predictive Analytics :
Predictive analytics can help identify potential fraud by analyzing the most common operational patterns regarding trades, purchases, and payments. It helps banks segregate risky customers from the risk-free ones.AI can detect specific patterns and correlations works with structured data like transactions and emails, reviews, forum entries to uncover the hidden pattern.