In 21st Century Artificial Intelligence (AI) is already an integral part of our everyday lives. Just imagine that a car can automatically be parked by your voice only or imagine all your home appliances can be turned on/off by just one click away anytime anywhere in the world. In this technological era, most electrical devices rely on AI protocols and discipline. Artificial intelligence in banking apps identifies threats and reduces the likelihood of fraud. Artificial intelligence (AI) can monitor transactional data and identify unusual user activity patterns.
This revolution in AI has happened because of better understanding and the interpretation of data collected from humans and rightly applied to technology for the betterment of the human race.
As AI has a huge scope in other fields, the banking sector is not behind too. Data gathering of the customers, worldwide transactions in the blink of an eye, rapid processing needs, the introduction of e-Banking to the world all happened because of AI. In today’s internet-driven world, AI is helping the banking sector by e-banking which is a huge development in the world of banking.
In the banking sector, AI’s growth can be seen. AI is helping the banks to process the complex analytical data, and also providing AMC (automating manual compliance) process which is used for the “Anti-Money Laundering” and “Know Your Customer”. These processes required vast data gathering by different sources to understand the customers and transactions. AI is providing opportunities to banks i.e., no middle (fraud detection and risk management) and back-office administration.
Top 9 Applications of AI in Banking
1. AML Pattern Detection
One of the interesting applications of AI in banking is AML pattern detection. AML or Anti-Money Laundering involves various methods, steps, laws, and regulations to stop illegal money generation. If somehow money transactions failed to follow these patterns, or a money launderer tries to hide or use shortcut ways for the transaction then this technology can prevent the generation or movement of money transfer from one bank to another. That’s how the illegal practice of generating income is halted.
2. AI chatbots
The most significant and common use of AI in banking is AI chatbots. This technology has modernized the banking way of dealing with customers and providing the best services without the involvement of a physical entity. Chatbots can respond to the queries of customers and assist them. As e-banking is growing rapidly, the banking sector is integrating AI chatbots to revolutionize customer management relations.
3. Collection and analysis of Data
AI’s major improvement in the banking sector is the collection of data of customers then analyzing them. This is a very critical analysis technique and requires perfect analysis for strengthening the user experience. This helps in making the user experience more easy and personalized.
4. Fraud Detection
This sector of banking received great strength and boost by providing accurate and perfect results of data gathering with the help of artificial intelligence. Fraud detection is the most developed sector of banking as many fraud detections helped saved money worth billions. Artificial Intelligence has helped in developing some technology with patterns that are helping in detecting such bogus transactions and catching the culprit. In the coming years, this area of banking will excel more and more.
5. Algorithmic Trading
Many hedge funds all over the world use high-end systems to integrate AI techniques and models. It is reported that as of now 70% of trading is carried out by AI systems. These systems learn from different outsources in financial markets and then help in the decision-making of investment.
6. Automation in banking
Growth in AI means growth in every aspect of life. AI provides automation in banking where the workload for a person is getting less each day. Now banks can help their customers or new customers 24/7. This has happened because of artificial intelligence. Automation in banking has been making data analysis and tasks simple.
7. Customer experience
With the introduction of E-banking, the whole banking system has been revolutionized from top to bottom. The mobile apps are deploying AI technology to provide simple and easy customer service. Money can be transferred with only one touch. Billings, top-ups, loans anything you say is just one touch away. These apps also provide the best offers and services to its customer on its search pattern which the bank is providing.
These apps are doing wonders, and this has happened by the integration of Artificial intelligence technology.
8. Risk management
Risk management is one of the critical parts of banking. Giving loans requires risk management. A minor mistake in risk management may lead to big setbacks for the banks. With the help of artificial intelligence, risk management is also excelling as AI can handle these critical and complex processes by gathering the data of that specific customer/borrower. AI is helping to minimize the possibility of fraud by deploying its strategies and patterns. It can identify the risks, learn the market trends and access as well as analyze the transactions of the borrower while giving the loan. Artificial intelligence has helped banks eliminate or lessen the risk factor in giving loans. Many fraudsters have been arrested with the help of AI.
9. AI and Data protection
In recent years the use of technology is getting more and more on both sides i.e. for protection and theft. There has been a visible rise in cybercrimes. Artificial intelligence is helping in this manner to protect the valuable customers of the bank. AI creates such patterns and algorithms which minimize the loss of money through internet banking. Artificial intelligence has a huge role in cybersecurity to protect valued customers.
In a small span, AI has taken the world by storm. It’s getting mandatory for every field and sector whether its power sector or banking sector to invest in Artificial intelligence because AI is the future. In the banking sector, the use of AI is rising day by day. It is now becoming compulsory for banks to integrate AI to facilitate their customers by providing the safest place for banking as well as giving access to money anytime anywhere in the world.
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