Artificial intelligence in banks has transformed the user experience, in addition to optimizing internal processes and reinforcing security to prevent fraud. Read on to learn how AI is transforming financial services, as well as the benefits of artificial intelligence in the banking industry.
What is artificial intelligence?
Artificial intelligence encompasses the development of computer systems with intellectual capacities to execute and solve tasks like humans. AI is nourished by technologies such as Machine Learning, Big Data, cognitive computing, Data Science or Deep Learning.
Currently, AI applications reach different fields and capacities. From the generation of content through generative AI with the Chat GPT system to virtual assistants and GPS applications.
Benefits of artificial intelligence in banking
In its development, artificial intelligence technologies in companies have demonstrated their potential to optimize various processes. An advantage that is also evident in the applications of AI in the banking sector with benefits such as these:
- Improve the customer experience.
- Optimize financial operations and help reduce costs thanks to process automation.
- Massively analyze large amounts of data to improve decision-making.
- It favors the safety and efficiency of operations.
- It uses predictive models and identifies unusual behavior patterns to warn of fraud and financial risks.
- The challenges of artificial intelligence in the banking sector
- While it is clear that the benefits offered by artificial intelligence in banking allow the sector to develop along the lines of innovation, efficiency, and personalization, there are some challenges to face to get the most out of AI in banking.
One of the challenges of artificial intelligence in banking is to increase knowledge of AI systems in financial institutions and determine the assignment of responsibilities. It is essential to delve into the operation of artificial intelligence models to balance their applications in the provision of products and services, as well as in taking measures that help control and prevent financial risks.
Likewise, another of the biggest challenges facing AI technology in banking is ensuring that these systems are ethical and respectful with the treatment of personal data. It is also necessary to establish protection criteria for the most vulnerable groups such as minors, the elderly,, or people with disabilities. Data privacy is therefore one of the most important challenges for the banking industry.
Artificial intelligence applications in the banking industry
AI technology in financial services fulfills four main functions: understanding consumer needs, improving credit management, controlling risk, and preventing fraud.
1. Personalized financial customer experience
AI in banking allows for intelligent software capable of analyzing customer data and offering the most appropriate products for them. And this provides a notable increase in the contracting of said products.
For example, if a customer spends a lot on gasoline and the entity offers a credit card that allows you to discount a percentage of refueling, it is much more likely that they will hire it. And, like this, it happens with many other services that, sometimes, customers are unaware of but could be of great help.
2. Automated credit management
Thanks to the use of data collected on age, income and expenses, salary, and debt risk, among others, AI technologies can automate the provision of bank credits, as well as other risky operations.
3. Control of defaults and financial risks
Given this scenario, artificial intelligence in the financial industry facilitates access to a large amount of information that favors the control of banking risk and decision-making in credit management. An added value taking into account that, according to EY forecasts, non-performing loans will rise by around 4% in 2023.
4. Security and fraud detection
Another of the most beneficial uses of AI technology in banking is its ability to improve security and ensure the privacy of personal data. For example, we find some applications in biometric authentication or documentation audits.
Learn about the challenges of artificial intelligence in banks
AI to improve customer service in banking
If we talk about the applications of artificial intelligence in customer service within the banking sector, chatbots or virtual assistants take center stage Thanks to them, in the words of José Manuel Aguirre, commercial director of AIS Group, banks, for Finally, they have discovered the customers.
With this phrase, Aguirre refers to the fact that, finally, financial institutions are focusing on dealing with customers to attract and keep those who have trusted them. Consequently, customer service is becoming a fairly clear priority for all entities.
But how can artificial intelligence help customer service? In the creation of virtual assistants, something like an iOS “Siri” but for banks. An assistant that can help customers solve their problems and doubts in real time.
The consumer is changing, because each time he has less time. For this reason, going to an office to resolve issues that could comfortably be resolved from home is something that is becoming more tedious and irritating every day. This was made clear by the number of people who migrated to the first banks that offered online banking, and each time this desire goes further.
Virtual assistants, also to sell in banking
Another application of artificial intelligence in customer service in the banking sector is the ability of virtual assistants to sell products and services. Ultimately, the user who feels grateful for said assistant and who finds it useful, places a high level of trust in it, so that when it recommends products and services, the customer will be more likely to value them.
The future of the banking sector powered by AI
In short, it is clear that artificial intelligence in banks offers multiple benefits to banks, as well as to their users. Some advantages that will increase in the coming years. Thanks to the applications of artificial intelligence in banking, financial institutions will be able to improve their services, optimize operations, control financial risks,, and protect users from fraud. In addition, they will serve their customers better and better and will boost the sales of their financial products.
To learn more about how generative AI is revolutionizing industries such as financial services, explore our article on Generative AI in Financial Services.
