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The influence of artificial intelligence on the banking industry

artificial intelligence

Artificial Intelligence (AI), just like all the other sci-fi technological advancements, used to be something that we read about in fiction novels and watch documentaries about with our family on Nat Geo. That was basically it. Its integration within our everyday lives was still quite far ahead.

However, things are much different now. Thanks to the exponential growth of machine learning and computer programming power in the last decade.

Artificial Intelligence is basically meant to be an imitation of human intelligence with some extensions added on top of it to make it more useful – like a calculator that can give you solutions to your math problems without you having to spend time thinking about it for yourself.

In today’s time, the question isn’t about when artificial intelligence will be integrated in our everyday lives, but about how much of it is already there. A quick example (for all you millennials out there) would be the filters you might have seen and probably even use day-to-day on your social media apps like Instagram or Snapchat.

Another great example would be the voice assistant in your smartphone, probably Google’s Google Assistant if you are an android user or Apple’s Siri if you are an iOS user. These assistants, in fact, are nothing but AI software designed to make your everyday life easier through voice recognition technology.

Pretty cool, right? We think so too. However, artificial intelligence isn’t just about goofy filters or voice assistants that often get your command wrong and end up sending you directions to your nearby restaurant when you simply wanted to know what the weather will be like tomorrow morning.

Seeing how incredibly game-changing AI tech is, it didn’t take us humans long to try to integrate it with almost every single part of our lives. From actual gaming to software that manage finances of multi-billion dollar industries, AI is incredibly powerful and certainly something that is revolutionizing the world as we speak.

Today, we are going to be exploring one of such use-cases of artificial intelligence: how it influences the banking industry and how the changes that it makes will affect global finance systems.

The Role of AI in the Banking Industry

Before getting into the details, let’s talk why such a dramatic change in the banking industry and almost every other industry was inevitable. All of that because of key reason: information.

Today, the average customer is not someone who needs to be told about the functionalities of the products or services they are consuming, but rather someone who already happens to be quite knowledgeable.

All of this, of course, is because of the internet and the information stored in it which is easily publically accessible to almost every single person on the planet. Today, people are more tech-savvy and exposed to advanced technologies in their everyday lives.

That’s why, competition is even fiercer between companies because better alternatives are always available to the potential customer. This led to an increase in the expectations of the customers with regards to the offerings made by companies.

The same applies for the banking industry. Because of this inevitable occurrence, banks are expected to be more efficient, secure, reliable, and fast. Thankfully, AI technology helps deliver almost all of those requests.

In fact, according to a recent research study, artificial intelligence is going to help financial institutions save about $1 trillion in project cost savings. Some stats by Accenture even show that AI will add $1.2 trillion in value to the financial industry by the year 2035.

Not just that, but artificial intelligence is an excellent way to minimize daily operational costs for financial institutions since they make for a great replacement against human employees who have to deal with a lot of repetitive and monotonous tasks like paperwork.

Through artificial intelligence, not only will banks and financial institutions be able to save time and minimize costs, but also increase overall productivity and eliminate error-prone human processes.

On top of that, AI will also make financial transactions really secure with better accountability allowing for reduced cases of money laundering – making the job of regulatory bodies such as the FATF relatively easier.

All of these combined makes use for a great opportunity for banks to ditch manual and repetitive activities to AI-based software and focus more on spending time with high-value tasks and create better plans and services for clients that are more personalized and offer greater levels of customer satisfaction.

Better Customer Support

This might come off as a bit counter-intuitive to some people – for obvious reasons. The general question that you might have in mind is that how is an AI software supposed to be better at handling humans than actual humans?

The answer is the same reason why most people today prefer withdrawing their money from an ATM rather than talking to an employee of a bank – it’s faster, more convenient, and frankly, easier than starting a conversation.

Through the application of AI tech, banks can exercise use of AI chatbots and voice assistants that can be optimized in a way that makes them able to handle almost any inquiry of the customer – especially at the times when a human employee might be off duty i.e. at night or on holidays.

An AI software wouldn’t need a vacation or an increase in salary to increase its morale to keep it working at peak performance – unlike an actual human being. It only requires occasional maintenance, if so.

Moreover, any skill that takes days or even weeks to be taught to a human employee, can be “installed” in an AI-backed software within a few hours using codes. All of this ultimately means 24×7 available service for the customer irrespective of their time zone, location, or requirements.

The best part about all of this is that AI software are always learning and bettering themselves by gathering new information from every person, every transaction, every activity, and every new feature that is being added to it.

In the coming times, it is predicted that artificial intelligence will completely replace most of the jobs in the banking as well as other industries and completely revolutionize the way we experience consumerism.

Thank you for reading this article. We hope we were able to help you gain some insight on the topic of artificial intelligence and how it influences the banking industry as a whole.

Read Next: How AI will help and change the remote work

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