Big Picture

Digital Metamorphosis in Retail Branch Banking through FinTech Innovation and Artificial Intelligence

The Retail Branch Banking (RBB) is for individual customers visiting a branch for accessing Accounts, Deposits, Withdrawals, Certificates, Credit, Loans and many more personal banking products. RBB in pursuit of automation, advancing from the traditional banking practices has initiated in deploying Artificial intelligence (AI) aided with FinTech Innovation by Start-ups.

This innovation in the business processes is termed as digital metamorphosis, acceptable in the new age of financial services in a volatile, uncertain, complex and ambiguous (VUCA) world. The banks like Citibank, Goldman Sachs and American Express have also employed AI services in preventing and mitigating financial irregularities.

This AI based technology as programmed, recognizes most suspicious activities, helping in optimizing costs that would have incurred on human intervention. AI is certainly a game changing revolution. Are CEOs aware that this is the next biggest opportunity spinning-off for start-ups in the Fintech space?

FinTech Innovation

FinTech innovation by start-ups has a critical role with AI-based banking solutions, such as AI Face Recognition, AI KYC Verification, AI Optical Character Reader (OCR), AI-Crowd Analytics and AI Chatbots.

AI Face recognition: The banking businesses are undergoing complicated tasks and issues related to the safety of their employees and customers. Monitoring people through cameras has become tedious, which is prone to human errors with no real-time actions. This process is being taken by AI face recognition application that detects, identifies and verifies faces to improve customer service and surveillance. It accurately detects intruders and potential miscreants leaving no room for error. Some current features include: –

  1. Emotion Recognition: This maps real-time facial expressions and recognizes emotions such as sadness, joy, fear with the image processing software. 
  2. Demographic mapping: It determines the age and gender of people so that you can send targeted advertising messages to your customers. 
  3. Track Attendance: This easily tracks the footfall of the customer. 
  4. Threat Detection: It identifies potential miscreants of threats alerting the security professionals.

What an opportunity for techies and individuals engaged in the banking & financial services institutions? Founders and CEOs must take lead on this FinTech revolution based on AI.

AI KYC Verification: The KYC check is carried by AI smart learning device that easily identifies the facial recognition and matches it with the repository. The AIs cutting edge algorithm using computer vision for document verification, including Aadhaar (For Indians) details through facial recognition, OCR and image analysis. The features include: –

  1. Minimize Risks: Automating labor-intensive processes increases speed, and ensures accuracy in verification, helping institutions to manage risks in a better and efficient matter.
  2. Ensures reliability: Document verification using facial matching sets clarity. It ensures accuracy by considering facial/hair/age changes, and variations in poses/angles.
  3. Maximizing the efficiency of operations: Near perfect accuracy in OCR and robust image analysis for facial matching increases the efficiency of redundant banking processes.

AI Optical Character Recognition (OCR): The business processes are slow and inefficient, involving monotonous tasks like reading a deluge of forms and manually typing the data. But with AI OCR, the cumbersome manual documentation processes are transformed into seamless digital workflows. The efficient OCR application automates the process by running alongside the standardized banking system. We can separate the sentences by reading characters from the scanned documents, eliminating the need to fill forms manually. The features include: – 

  1. Account Management: This speeds up the process of account opening by reading hand-filled documents and text extraction.
  2. Reduced errors: This minimizes the risk of data loss during data entry.
  3. Storage: It uses the the paperless approach with OCR by maintaining a scanned copy of all relevant documents. 
  4. Security: It avoids mishandling or theft and forgery of documents, reducing the risks of fraud.

AI-Crowd Analytics: This helps in accelerating the tracking of user, fast-tracking the customer, enabling intelligent business decisions and analyzing the behavior of potential customers. It sums up customer footfalls, thereby optimizing sales and marketing activities needed to drive business growth and increase profitability by analyzing the movement of people in real time. The features include:

  1. Crowd count: It detects and counts the density of people in an area and sends real-time alerts on overcrowding, helping infrastructure optimization and predicting potential stampede situations.
  2. Crowd flux: In a particular area, it estimates the number of individuals in a crowd.
  3. Crowd dispersion: It detects sudden random movement in a crowd and sends real-time abnormal behavior warning alerts by identifying potential security threats.
  4. Demographic mapping: It determines the age and gender of people in a crowd and uses this data to make marketing efforts more targeted, personalized and effective.

AI Chatbot for Services: The Chatbot can learn complex activities such as responding impromptu to the service-based requests, queries and complains, ensuring customer satisfaction, real-time processing, task management and more. The experience of having a conversation with a bot is similar to the tested and proven IT-based services. This featured e-commerce services bring in:

  1. Reduced operational costs with 24/7 availability
  2. Real time interaction for Personalised communication for personal banking
  3. Automation to entire e-commerce customer lifecycle 
  4. An immediate resolution to customer queries through AI Conversational Commerce
  5. An amazing customer experience and satisfaction

CEOs operational readiness 

FinTech Start-ups are aligning with established banks to design solutions for activities like Account opening, know your customer (KYC), Credit Decisions, Risk Management, Fraud Prevention, Personalized Banking , AML (Anti Money Laundering), Omni Chanel Utilization, Outdated old technologies, High demand for customer service, Verification of deliverables, Clarity of Product description, Mismatch of customer information via customer service agents, Failure to access customer data, Easy routing for customer complaints, queries, and resolution, Securing Digital Identity, Reducing false positives, Conversational Payments and Interactions across various banking channels. Moreover, digital metamorphosis through AI is automating Personalized Banking, Financial services, Cost optimization, Advance Risk Management, Preempted fraud scenarios, Credit decisions, Process Automation, Voice Assisted banking, Business Acceleration, Insight Generation and unique Value Propositions. 

The credit worthiness of each financial institution in the future will be based on its operational effectiveness, only plausible through embracing and critically integrating the new age technologies like AI etc. How much are you prepared as a financial institution will decide your future, are your prepared for this digital metamorphosis?

Written by Dr. Manoj Joshi.

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Prof. (Dr.) Manoj Joshi
Dr. Manoj Joshi, is co-Author of "The VUCA Company”, “The VUCA Learner” and "VUCA in Start-ups". He is a Chartered Engineer and currently a Professor of Strategy & Entrepreneurship and Director, Centre for VUCA Studies, Amity University. He is the Regional Editor India, JFBM; IJSBA and an editorial board member for journals like APJM, JSBM, BSE, JEEE, WRMSED etc. His consulting includes VUCA strategy, travelled extensively with over 30 years of experience in areas of Screw pumps Design, Heat Exchangers, Loading Arms, consulting, research and teaching. He has a deep interest in dark matter, dark energy, astral travel, travelling to woods and life after death.

Dr. Manoj Joshi is an opinion columnist for the CEOWORLD magazine. You can follow him on LinkedIn.