How Artificial Intelligence has transformed the Banking sector

Artificial Intelligence technology is becoming an integral key in banking to meet customers’ rising expectations and optimize organizations’ performance.

Over several decades, banks have continually applied the latest technology innovations to redefine the interaction with customers. In the digital era, customers require immediate responses and stronger commerce connections.

Financial institutions are now delivering the utility to them not through the products or one channel; but through the customer journey that is personalized and truly omnichannel.

With AI as the foundation, banking institutions can create distinctive customer experiences while facilitating their internal operations.

Improving customer experience

Instant delivery of products and services has become an essential requirement for banking users. As a result, banks now aim to provide tailored customer experiences to increase retention rates and attract new audiences.

Thanks to AI applications, they can offer customers relevant and timely products, services, and communication according to their past behaviors. 

banking technology mobile phone

Various platforms have implemented AI-enabled chatbots and virtual assistants, including websites, social media, and applications, to provide 24/7 service. They could offer clients instant assistance in mobile banking setup, guidance on opening saving accounts, and other frequently asked questions.

The automated bots will also help bankers quickly process simple yet time-consuming queries like processing credit card bills or generating bank statements.

HSBC, one of the world’s largest financial services institutions, has employed chatbots and yielded remarkable outcomes. In 2019, the bank held 10 million chat conversations a year, reducing emails on simple trade statuses by 30 percent a month. They expect to handle 10 million a month by 2024.

Many institutions are also using the combination of AI and biometric authentication as identification and recognition solutions. Some distinctive human features, such as the face, fingerprints, and voice, are converted into code that the AI system can read.

This encoded information is saved in a database and used to identify digital scams and accelerate the verification process. With the whole “new banking experiences” created by AI, the banking sector has certainly gained far more trust and customer loyalty.


Advancing operations

Financial institutions are diffusing and scaling AI solutions throughout their organizations. AI implementations revolutionize the client service for the front office and maximize the efficiency in the back and middle offices’ operations.

The middle office can use AI to power the detection and prevention of fraud. AI can perform real-time regulatory checks for anti-money laundering and Know-your-customer obligations in vast amounts of data.

Overall, it can identify potentially fraudulent transactions more swiftly and accurately than traditional methods relying on human staff.

AI-driven tools have helped audit companies like ComplyAdvantage and Shift Technology achieve an 84 percent reduction in false-positive alerts for anti-money laundering risk data. 

In customer support, AI can internally synthesize data across multiple systems to provide clearer client sentiment insights. The senior executives could analyze and produce better cross-selling opportunities.

In the back office, AI automates tedious tasks like invoicing, payment collection/reconciliation and helps employees be more effective at their jobs. That makes the financial process more accurate, transparent, and time-saving.

It can also eliminate labor-intensive tasks such as:

  • Exporting manual trend analysis
  • Reporting
  • Writing macros.

Besides, AI technology could complete validations and checks across functions of the organization. For example, it could help managers monitor bank tellers’ performance in speaking cadence and responding to users’ questions. They will be alerted in case there are inappropriate respondences needed to be adjusted immediately.

Moreover, with the support of AI-powered programs, bankers will seamlessly locate the knowledge they need to navigate a workflow and offer the best solutions to their customers. 

financial analytics

Artificial intelligence technologies are increasingly essential to the world we live in, with their transformative impact across industries, including the banking sector. Thanks to AI deployment, banks can use large data history to make much better decisions and prevent underlying risks.

Adopting AI technologies across the bank organization is no longer a choice but a strategic imperative to ensure competitive advantage and differentiation in the industry.