Thanks to machine learning and artificial intelligence, known more commonly as AI, a significant evolution has taken place in the financial and banking industry.
These changes have been more evident during the last decade, whereby consumers and investors now have the tools to access new, important types of financial products and also have established a brand new potential for growth.
Below are 5 of the most crucial changes banks have been making.
- More accessible technologies for consumers
- Lower fees
- Individual and personalized financial products
- Compensation for weaknesses
- Refined asset-management algorithms
So that we are better able to understand Artificial Intelligence, and how it’s ready to totally transform the way we bank, let’s take a brief look at exactly what artificial intelligence is.
What is artificial intelligence?
Artificial intelligence or A1 is a section of computer science that highlights the formation of intelligent machines that can work, and also react like humans. Some of the activities computers with artificial intelligence are designed for include:
- Speech recognition
Now we’ve looked briefly at what artificial intelligence is and the skills they are able to bring to our current computing world, let’s take a look below at how this brand new and revolutionary technology is beginning to change the face of banking.
How is artificial intelligence transforming the banking industry?
According to Entrepreneur.com banking, the finance sector and Wall Street are set to make trading algorithms more reliable, lower fees and offer more personalized financial products by using artificial intelligence as a core part of their operating systems.
Millennial and Gen Z
We are looking into an incredibly exciting future as the more financially educated and technically orientated younger generation, such as millennials and generation Z become increasingly wealthier.
Banks will be looking at creating a far more intuitive experience for this tech-savvy younger demographic. This will include apps that allow customers to control their banking and other investments faster and better and with more AI semantics.
Reduce paper processes
The bank industry is largely digital in operation, but it is still heavy with time-consuming human-based processes that are based around paper. By using artificial intelligence processes, banks are able to reduce costs, time and overall risk when using AI.
More effective credit scoring
Banks will also be working on products that can help to repair and better credit scores. This will sit alongside actively improving their returns on investments and other important banking and financial functions.
Similarly, banks are using AI-based systems to help make more informed, safer and profitable loan and credit decisions.
Many of our banks are still using older methods of credit scores, credit history, customer references, and banking transactions to determine whether or not an individual or company is creditworthy.
‘Similarly, banks are using AI based systems to help make more informed, safer and profitable loan and credit decisions.’
Banks using AI are contributing to the global economy
According to a report by the IDC, By 2030, AI could be assisting the global economy by a staggering $15.7 trillion.
Now we’ve seen how banks and financial institutions are looking at improving their customer experience by using technological advances such as Artificial Intelligence, it may be some time before we start to see those changes being fully implemented and commercially put in place.
Let’s finish on a quote by leading industry expert, Vikram Atal. He is a globally-oriented leader in the consumer financial services arena, with three decades of experience.
‘If you compare banks with companies like Google, it’s evident banks are still at the nascent stage of the digital and data revolution.’
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and 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.