5 Applications of AI to elevate the banking and finance industry
The role of AI in banking and finance is becoming more and more important. Statistics show that the adoption of AI in this sector is expected to grow by more than 25 percent between 2022 and 2027. This indicates that every business needs to start implementing AI or they won't be able to keep up with their competitors.
AI technologies are available in a variety of forms, but they all aim to reduce workload, eliminate errors, and increase the quality of work, thereby allowing us to work more efficiently with fewer resources and less time. The same holds true for AI in finance and banking. The diverse capabilities of AI will undoubtedly enhance the efficiency of banking and finance businesses.
Whether to create better user experiences, make informed loan decisions, improve system security, or act as a financial advisor - all of these are possible within the realm of AI capabilities. Today, Sertis will introduce everyone to these AI solutions in financial businesses.
1. Create a personalized banking experience
Firstly, one of AI's major strengths is the ability to analyze massive amounts of data rapidly. This capability allows us to create solutions that improve customer experiences and maintain lasting customer relationships. Personalized services based on the analysis of historical customer usage data across all dimensions are one of the most effective ways to impress customers. The data enables us to understand customer needs and preferences, allowing us to offer certain services at the right point in time. Creating a personalized experience is not just an option; it is essential for businesses that want to stay ahead of their competitors in the ever-increasingly competitive financial industry.
There are many examples of how AI can be used to create a personalized banking experience, including implementing a chatbot to answer customers' questions, using a voice command system like Siri or Alexa to create various transactions such as checking balances, scheduling money transfers, and more.
Another application of AI in banking and finance is to create a platform that utilizes AI to manage our finances. For example, it can assist in tracking our incomes and expenses, analyzing spending behavior, automatically setting aside savings, and suggesting alternative spending plans that help reduce our expenses as much as possible. More than 53 percent of bank customers who have adopted this solution see it as a game-changer for the banking industry.
2. Analyze loan decisions
AI can also assist in the loan approval process, by analyzing customers' historical data such as income, occupation, education, assets, and financial stability, as well as payment histories, demographic data, and even behavioral data like internet usage history. This analysis helps assess the risk of loans and the ability to repay debt, while also helping to determine credit limits and interest rates.
Banks can speed up analytical processes and save staff effort by using AI to analyze these data. Currently, we have developed Optical Character Recognition (OCR), an AI that can read and convert text from images, which saves significant time in the analytical process prior to making a decision. By deploying this technology, all the data can be ready for humans to consider before making the final decision.
3. Enhance security in transactions
Data that circulates in the banking industry is critical and sensitive, making a safe and cautious security system essential. Banks around the world are beginning to consider moving all the data such as financial data, and usernames and passwords of mobile banking applications, from the database to the blockchain system which is more transparent and secure.
Moreover, we can leverage machine learning technologies such as facial recognition, voice recognition, and other biometric identification methods to enhance security and provide additional layers of protection, while also making transactions more convenient and elevating the customer experience to a new level.
Applying Natural Language Processing (NLP) technology to monitor email and data that are sent and received in the bank system helps detect suspicious behaviors and data leaks, which is another efficient application of AI in banking security.
4. Utilize a Robo-advisory platform to provide investment advice
Robo-advisory is a platform that provides automated investment advice and management. It is an intelligent assistant that takes care of customer portfolios in financial institutions. Serving as an investment advisor, it is able to optimize investment portfolios tailored to clients' investment goals, timelines, and risk tolerance. It uses algorithms to process real-time market analysis and automatically rebalance portfolios.
We can train the machine learning models in the Robo-advisory platform with financial investment data such as clients' risk tolerance and requirements. After learning these data, the model will automatically analyze, select, and manage the portfolios based on the investment style that is suitable for the clients. The platform also sends clients notifications every time there is a rebalance in their portfolios. All the clients need to do is to consistently deposit money.
Using a Robo-advisory to assist in portfolio management is a cost-saving solution that is lower than hiring a human advisor. It also eliminates the opportunity cost from the fact that human beings may not be able to comprehensively analyze investments, causing them to overlook some investment opportunities. Additionally, it reduces errors from improper portfolio rebalancing.
5. Apply process automation to automate routine tasks
Using Robotic Process Automation (RPA), an AI that can replace humans in repetitive or time-intensive tasks, is an effective way to reduce costs, eliminate human errors, and increase productivity in financial institutions. Statistics show that some organizations have reduced operational costs for these tasks by 50-70 percent.
An automated system can be used to perform routine and time-sensitive tasks, such as validating data, generating reports, checking clients' documents, and converting images into text.
Currently, various AI technologies can assist in saving labor across numerous tasks, providing organizations with choices of solutions that align with their specific needs. However, it is crucial to keep in mind that the chosen solution is suitable for every aspect of your business, capable of addressing your unique challenges, and can genuinely drive changes in your business.
At Sertis, we develop solutions leveraging a wide range of AI technologies. We specialize in creating customized solutions tailored to the unique needs of organizations across all industries, including the financial sector. We enable businesses to invest in the most efficient technology suitable for their needs. We are committed to driving operational improvements, boosting profits, and fostering sustainable business growth.
Learn more about solutions from Sertis at: https://www.sertiscorp.com/services