Worldwide spending on artificial intelligence is expected to increase dramatically by 2024. Leaders in every industry — including banking and financial services — are quickly discovering the incredible value of AI. By leveraging this technology, financial institutions can better manage privacy and fraud, increase cost savings, and improve the overall customer experience.
According to research from the Organization for Economic Cooperation and Development, worldwide spending on artificial intelligence will jump from $50 billion in 2020 to $110 billion by 2024. It’s not hard to see why: Consider how helpful customer service bots are or how optimizations can reduce operating expenses. Financial institutions have noticed and are adopting AI at a rapid pace.
Machine learning, computer vision, and natural language processing are just some of the AI technologies that banks and financial institutions can use to gain a competitive edge. Nearly 60% of leading financial institutions have at least one AI capability embedded, McKinsey & Company reports. But how exactly can you benefit from this evolving technology? Here are three ways you can use AI to boost your business:
- Better manage privacy and fraud.
A recent study found that a significant amount of pandemic-era Paycheck Protection Program loans were potentially fraudulent. And when regulators like the Bank of England are drowning in 65 billion pieces of data each year, it’s hard to tackle the issue. Luckily, recent advancements in AI help you to filter through data, find patterns, and detect fraud in real time. “When you’re a financial director, protecting your firm and its clients from fraud and privacy breaches while complying with ever-changing regulations can be a full-time job,” says Beverley McCarthy, program manager for strategic insights at MindBridge, the world’s first and only AI-powered auditing solution that protects others by serving the human need for understanding business-critical data. “AI can help shoulder that load as it uses advanced pattern recognition to identify any anomaly in a data set, making AI tools far better at detecting fraud and mitigating potential risks.” Don’t overload your team members with too much data. By leveraging AI, you can better control privacy and fraud.
- Increase your cost savings.
AI is estimated to save the banking industry $447 billion by 2023. How? Robotic process automation software, optical character recognition, and other AI technologies are lightening human workers’ loads, allowing you to do more with less. With AI, Accenture estimates that you can process between two to five times the volume of interactions or transactions with the same number of team members. “The banking industry is largely digital in operation, but it is still riddled with human-based processes that sometimes are paperwork-heavy,” says Cognilytica’s Ronald Schmelzer. “In these processes, banks face significant operational cost and risk issues due to the potential for human error.” By investing in AI, you can help your staff be more productive without sacrificing quality. In fact, your institution’s quality of work might improve due to fewer manual errors.
- Improve your customer experience.
According to McKinsey & Company, “Banks that leverage AI and analytics to deliver smart servicing and superior experiences stand to increase customer satisfaction and loyalty. Research shows that the stronger the experience and the more satisfied the customer, the more likely it is that the bank will generate higher revenue.” Traditional banking experiences just aren’t enough to satisfy today’s customers. For instance, long customer service wait times and limited hours might prompt people to consider competitors. Luckily, AI relieves these problems. Chatbots are always available, and they’re becoming more sophisticated every day. They’re not only capable of accessing accounts and resolving common payment issues, but they can also effectively upsell customers without involving human staff.
However, commercial chatbots are rudimentary when compared with recent breakthroughs in modern natural language generation. One advanced AI chatbot even has a former scientist at Google believing that it is sentient. If you invest in and refine AI technology for your institution, you can personalize the entire customer journey and increase customer lifetime value.
AI isn’t new to banking; it has been a part of both the industry and financial regulations for decades. However, it is starting to expand at a rapid pace, drawing a line between the haves and have-nots. If you want to stay ahead of the competition and reap the benefits of improved control over privacy and fraud, increased cost savings, and a better customer experience, you must take advantage of modern AI capabilities as soon as possible.
Written by Rhett Power.
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