Artificial Intelligence technologies have disrupted banking and finance sectors in recent years. Digital innovation is being felt and these sectors have transformed strategy to incorporate AI technologies. The finance sector has been favorable in incorporating AI in strategy for a good few years, whereas the banking sector is slowly adapting, benefitting from providing more efficient service to its customers.
AI has been seen as a key component for every sector in the 21st century and is shaping operational processes and introduces a brand new efficient way of working. Whilst we still haven’t reached the peak of AI, it’s not going to be long until the world experiences how far AI will drive the world forward. Customers are recognizing the process of incorporating AI technologies, and it can be said that big progress is being made as to how customers are interacting with their banking and financial services. Mobile banking, real-time money transactions, fraud detection, and predictive analytics are some of the integrations that some of the key banking and finance institutions have introduced over the last few years.
It is guaranteed that in five years from now, the digital landscape with artificial intelligence is expected to take the banking and finance sectors by storm. Let’s take a look at four ways in how the banking and finance sectors will look with new developments of AI over the next five years.
- Guarding Against Fraudulent Activity – The high volume of transactions that occur through mobile banking has heightened the risk of potentially fraudulent activity. Artificial Intelligence is introducing new efficient measures to better manage and capture fraud. Through predictive analytics, artificial intelligence can identify any transactional irregularities and trends which may link to fraud. Depending on the amount and volume of transactions, the predictive engine makes banks well equipped to block transactions. This instance may not necessarily confirm a transaction as fraudulent but helps to protect and secure customers and their activity. AI is rolling out new technologies such as anomaly detection, image recognition, and biometrics to further improve the security of access and transactions.
- Recommendation Engines – AI has transformed the way customers interact within the banking sector. Customers are now seeking a simplified service that delivers products and services that they expect. Banking institutions are expecting to learn from user behaviors and trends to recommend appropriate strategies, plans, accounts, and other offers that save users time in browsing for what they need. Customers are expected to become loyal banking customers if banking companies work for them.
- Character Recognition – Some banks, such as JPMorgan, have introduced in-house software that extracts key data from 12,000 documents through automation in seconds, something that would take approximately 360,000 seconds. This helps reduce resources, time, and costs significantly. It significantly helps to reduce error-banking and information misplacement by instantly recognizing different styles of writing for a computer to learn and extract data accurately.
- Advisory Chatbots – Known as virtual assistants, many industries are seeking virtual agents to interact with customers through written language, whilst performing administration tasks such as checking accounts or tracking payments. Whilst it picked up huge momentum that has cut out the middleman in managing customer inquiries, chatbots can improve even more. Chatbots are predicted to soon become a virtual agent through online communication platforms to discuss financial information and help better navigate through financial products and offers. MasterCard and Capital One have launched this as a 24/7 service.
According to Deltec Bank, Bahamas – “Artificial Intelligence is now becoming a powerful reality if it hasn’t been realized already. The digital revolution has introduced a rise in AI technologies that are disrupting banking and finance by promoting better simplicity and efficiency in its already complex strategy.” Within the next five years, banking and finance are going to be revolutionized, and expect the key innovations explained above to be part of everyday AI, amongst many more disruptive technologies, changing the way businesses and customers do banking and finance.
To sum up, artificial intelligence has not reached its peak, but banking and finance are already reaping the rewards or incorporating its technologies into a strategy. It’s making their strategy more effective, simple, and efficient. Customers are adapting to a new way of interacting with their financial and banking services, and it will not be long until we see huge progress in AI technologies within these industries.
Disclaimer: The author of this text, Robin Trehan, has an undergraduate degree in Economics, Masters in international business and finance and an MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries, and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.