The banking sector is rapidly shifting towards technology as the industry stores the world's wealth in databases and transactions that simply exchange information over networks. New-age technology here, such as Artificial Intelligence particularly, can assist the industry, from accounting and sales to contracts and cybersecurity.

Not only tech leaders, industry experts, and researchers also agreed that AI is the key component will shape the industry in years to come. On AI's revolution, Google CEO Sundar Pichai said, "AI is probably the most important thing humanity has ever worked on."

In its effort to digitalization, several banks now are teaming up with financial technology (FinTech) startups to provide advanced banking solutions to their customers. Considering reports, AI is predicted to save the aggregate potential cost of approximately US$447 billion for banks by 2023.

The Need of AI in Banks

The banking sector has witnessed ground-breaking changes in recent years using cutting-edge technologies. Even they are expanding their industry landscape to retail, IT and telecom to enable mobile banking, e-banking and real-time money transfer services. But these are also leading cyber threats as the transfer of critical information over virtual networks continues to increase and banks are falling prey to the competition posed by fintech players.

However, making use of cognitive technology with AI brings the advantage of digitization to banks and assists them to meet the competition posed by agile fintech leaders. As per a joint research conducted by the National Business Research Institute and Narrative Science, nearly 32 percent of financial service providers are already utilizing AI services, such as Voice Recognition, Predictive Analytics, among others.

Furthermore, there are several reasons banks are increasingly adopting AI applications, include the vast competition in the banking sector; push for process-driven services; demand from customers to provide more customized solutions; increasing employee productivity; vision to expand human work through the use of software robotics; creating operational efficiencies; taking effective decisions and actions and much more.

Strengthening the Competitiveness of Banks 

Today, banks are leveraging AI to streamline a range of processes, including Accounting, Merchant services, Fraud and Cybersecurity, Risk Management, Compliance, Customer Service, Financing and Loans, Asset Management, Internal Audit, Sales, among others.

Most of the banks are highly aware of the potential benefits of AI as it provides:

Enhanced Customer Experience – Customer service is at the forefront of any business. AI here can be leveraged to derive a better understanding of customers spending patterns that will assist banks to customize products by complementing personalized features and build strong relationships with their customers.

Effective Decision-Making Capability – Harnessing cognitive systems provide optimal solutions based on available data in real-time as it thinks and responds like human experts. These systems keep a repository of expert information in its database that allows bank managers to utilize it to make strategic decisions.

Future Outcome and Trends Prediction – AI assists banks to envisage future outcomes and trends as the technology has the ability to assess past behaviors. It also helps in detecting frauds, anti-money laundering pattern and make customer recommendations. As AI identifies these concealed actions, it supports in saving millions of amounts for banks.