Artificial Intelligence(AI) Is Revolutionizing The Banking Sector
Artificial intelligence also called machine intelligence, is any technology that makes a system replicate human-like intelligence is known as AI. In artificial intelligence, a machine mimics the cognitive functions of a human such as “problem-solving”, “speech recognizing”, “planning” and “learning”. AI uses machine learning to leverage the entire automation process of artificial intelligence. Owing to the benefits of artificial intelligence and machine learning, eventually, every business nowadays is adapting to this new technology to transform their core process and business models. This article will highlight how the AI is shaping the banking industry.
AI and the banking industry
There are lots of new technologies like blockchain, cloud computing, data science, biometrics are entering the banking sector today. These technologies have started to gain exposure in the banking sector. On the other hand, AI has laid a tremendous impact on the banking sector and its functions. Computer systems that perform tasks like humans is a greatest innovation and advancement of the use of artificial industry in the banking sector. Decidedly, we can say that AI is the future of the banking industry.
How is artificial intelligence(AI) used in the banking industry?
Computer systems powered with AI are responsible for nearly 70% of the trading today. Based on the inputs obtained by the AI models, high-frequency trades are made wisely. Plenty of hedge funds make use of this artificial intelligence model to facilitate trading. Financial markets and institution started deploying artificial intelligence to make to make decisions regarding investment on the fly.
Detecting Anti Money Laundering(AML) patterns
Money laundering is the process of showing the illegally earned money to be legal. The illegally earned money is considered “dirty” and the process “launders” the money to make it legal. AML contains the laws and regulations in order to prevent this money laundering process. Here AI-based systems are used to detect these money laundering activities.
Chatbots are AI based automated chat systems. These chatbots are largely used by the banks to improve customer relationships with zero human intervention. Chatbots identifies the context in the text and works more accurately replicating the human intelligence.
AI has a phenomenal impact on fraud detection. The software systems powered by AI models, with its human-like intelligence analyses tons of transactional data and discover fraudulent activities. AI systems have marked the greatest influence in finding the fraudulent trends happening in the banking industry.
AI application in top 4 Indian banks
State Bank of India (SBI)
State Bank of India, India largest bank with 420 million customers have adapted artificial intelligence(AI). With regards to it AI mission, SBI has launched a national hackathon- “Code For Bank”. This “Code For Bank” focuses on the blockchain, digital payments, robotic process automation, chatbots, IOT and machine learning.
SBI has also launched SIA, an AI-powered chatbot, that assists in daily banking functions. Since its launch, the chatbot has handled nearly 10,000 inquiries per second or 864 million in a day. This can be compared with the 25% of the queries processed by Google every day.
HDFC the renowned private bank has launched an AI-based chatbot called “EVA”(Electronic Virtual Assistant). EVA was launched in March 2018 and addressed over 2.7 million customer queries, held 1.2 million conversations and interacted with over 530,000 unique users. From 17 countries across the globe, EVA has answered more than 100,000 queries.
ICICI Bank the second-largest private sector bank has deployed “software robotics”. Software robotics automates office work which emulates human actions to automate high-volume and time-consuming business tasks. Here the software robots perform more than 1 million banking transactions per day.
In February 2018, the Bank launched its AI-based chatbot, named iPal. The chatbot has interacted with 3.1 million customers, with a 90 percent accuracy rate, and answering about 6 million customer queries.
India’s third-largest private sector bank launched an AI & NLP (Natural Language Processing) enabled app for facilitating financial and non-financial transactions. Currently, the bank is using robotic process automation (RPA), for various banking functionalities. This RPA reduces the turnaround time for each transaction and new account opening time period. Savings account opening has reduced by 90%, on current accounts by 92%, and on other processes by 50%-80%.
The above said are a mounting evidence that shows how the AI is shaping the banking industry today. AI and Machine learning will surely transform the entire banking facilities with its irreplicable software systems and business models that will benefit both the banking sector and the customer. AI, Machine learning and Blockchain will not only transform the banking industry but other leading industries in the world too.