The 18 Top Use Cases of Artificial Intelligence in Banks
“Machines are getting smarter globally. Thanks to thriving Artificial Intelligence (AI) concept, companies can make their devices more powerful and ‘intelligent’ to serve their customers in a better way. Both B2B and B2C businesses have started adopting this revolutionary technology as per their scale and size.
However, the penetration of AI in the banking sector is somewhat limited to date. The distinct datasets and the risk of confidential data are primarily responsible for the sluggishness of AI integration in the banking system. But then, as the online banking and mobile banking become increasingly popular as a tool for 24/7 transaction, we can expect that AI will soon take over.
The rise of AI in Banking
Robust and rapid processing needs, advent of mobile technology, data availability, and proliferation of open-source software offer AI a huge scope in the banking sector. Though AI has been used in banking for decades, it remained unnoticed. In today’s app-driven world, the banking sector eyes on leveraging with the help of mobile app development companies.
Digital personal assistants and chatbots have revolutionized the customer services and business communication. From assisting people in performing daily tasks to giving them a personalized experience, virtual assistants and chatbots have many applications. Talking about the banking sector, mobile app development services can integrate the AI technology for enhancing services.
Integration of AI in Mobile Apps for Banks
Most of the banks have started embracing AI and related technologies worldwide. As per the survey by National Business Research Institute, over 32 percent financial institutions use AI by the means of voice recognition and predictive analysis. Banks are using AI technology for enhancing the customer experience by giving it a personalized touch.
Millennials rely heavily on mobile banking, which means that AI-powered banking mobile apps can attract them. Such apps can readily meet the user’s expectations with personal, contextual, and predictive services. These are intelligent apps that can track the user’s behaviors and give them personalized tips and insights on savings and expenses.
How AI Enhances Customer Services
The banking and finance sector grows by leaps and bounds. Millions of transactions are done online irrespective of time and place worldwide. We can mention that automated processes and other applications are largely attributed to the integration of AI in banking system and mobile banking apps. The main role of AI in mobile banking domain is to improve the customer service.
Let’s start with customer support. Automated AI-powered customer service representative can serve the purpose with ease. After gathering the data from the user’s mobile devices, the AI-based mobile banking app processes the data through machine learning to provide the relevant information or redirecting the users to the source of information.
Secondly, it is easy for a banking app integrated with AI-related features to show services, offers, and insights in line with the user’s behavior. What’s more, the app handles the advice and communication part by analyzing the user’s data. Banks can give online wealth management services and other services by integrating AI advancements into the app.
When it comes to personalized planning, AI banking apps can work wonders. It is easy to assist the users in financial planning with AI strategies. For example, if the user wants to buy a new house, the mobile banking app can guide the user with budget and other related details on the basis of current expenditure and income.
Benefits of AI for Banking Sector
AI has an immense potential for the banking sector. It brings an automation and simplifies the process. Here are a few noteworthy benefits of AI for the banks:
Reduce workload
Here is an example of a chatbot. It can act as an answering machine and serve the customers continuously throughout a day. It can answer the simple questions of the users of customized banking app and redirect them to the bank’s website if necessary. Direct and basic operations including opening or closing the account, transfer of funds, etc. can be done with the help of chatbots.
As compared to the phone call, the chatbot offers more feasible option to the user as it can provide the useful links for finishing the process. The chatbot can also offer instant connectivity and reduce the workload of customer care executives significantly. Though customer care executives are serving the customers well, they have limitations of time and the number of persons they can attend in a day.
Accumulate and analyze useful data
The revolutionary AI technology works on the principle of data collection and analysis. Any AI system can work well with better data sets. A tailored mobile banking app enriched with AI-based features can collect all the relevant and useful data of the users to improvise the learning process and enhance the overall user experience. After accumulating and analyzing the data, the experience can be made more personalized.
Also, the data regarding financial transaction can help the bank understand the expenditure pattern of the customer. The bank can come up with a customized investment plan accordingly and also assist the customers for budgeting. What’s more, banks can send the notification about the advice for keeping a check on the expenses and investments based on the data.
Drive banking business
Wealth management and portfolio management can be done effectively and efficiently with AI. It can bring ‘banking at your fingertips’ for the users who just hate to visit the banks. It strengthens the mobile banking facility by managing basic banking services. Customers can get the benefits of automated and safe transactions. They get notification instantly for any suspicious transaction as per their usual patterns.
Another useful application of AI is a card management system. It not only automates the credit and debit card management system but also makes it safer. It helps the customer get rid of a long authentication process in the case of losing the card. The AI system saves time and efforts of the customers and in a way, improves the mobile banking services.
- Handle risk management
Risk assessment process while giving loans is very complex and critical process. It requires both accuracy and confidentiality. AI can handle and simplify this process by analyzing relevant data of the prospective borrower. AI can combine analyze the data related to the latest transactions, market trends, and the most recent financial activities to identify the potential risks in giving the loan.
Banks can also get the idea of the prospect’s behavior with AI-based risk assessment process. AI can minimize the probability of error in identifying even the slightest probability of fraud. The predictive analytics can manage the entire process smoothly.
- Prevent frauds
Banks should be bankable for providing secure and swift transactions. AI is designed to detect the fraud in the transactions on the basis of a pre-defined set of rules. Also, the mobile app can find out any suspicious activity in the customer’s account on the basis of behavior analysis. For example, any online transaction of a huge amount from the customer’s account that has a history of small transactions can be figured out instantly.
AI also plays a vital role in protecting personal data. As we witness a rapid rise in the instances of cybercrimes in the recent years, AI-based fraud detection can lend a helping hand in preventing such attempts. So, for banking and finance sector, AI has a tremendous scope in the domain of cybersecurity. The mobile app development services can address the issue of fraud and data breach while developing an AI-powered mobile app for the banks.
- Hedge fund management
Globally, hedge funds prefer AI-based models. It is because AI-related tools can fetch real-time data from various financial markets across the world. Also, AI models can analyze the mood or sentiments of different financial markets and come up with an accurate prediction. These inputs and sophisticated algorithms make AI models capable of assisting the users to take decisions quickly.
Hedge fund trading and management can be done on the move with the help of AI-based mobile app solutions for the banking sector. These solutions help the banks to mitigate the risks associated with overexposure and user intervention in the market.
In brief, AI can provide the next-gen security to the banking sector. A mobile app development company can integrate the necessary functionality and technological advancements of AI to make the most from this emerging technology. AI-based mobile applications can make the transaction quicker and safer. Banks can handle the customer-oriented operations with ease while reducing the cost of hiring additional employees.
Concluding Lines
AI has many benefits to offer for the banking sector. Be it an Android app development or iOS app development, the AI can bring revolutionary changes in the banking industry. The bank and financial institutions can understand the user’s behavior and give the personalized experience through an app.
Solution Analysts is a prominent IT solutions provider that offers customized business solutions by integrating the futuristic technologies like AR, VR, AI, and Blockchain. Our professionals are expert in using technological advancements for developing premium mobile app solutions in a cost-effective way.”
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group
