June 27, 2022 | Bitscape Team, AI
Due to increased consumer expectations, shifting preferences, the need for risk mitigation, and cost optimization, the banking and financial services business is undergoing a major digital revolution.
Financial institutions have shifted from legacy workflows to adopting new technologies based on mobile-first strategies, artificial intelligence (AI), the Internet of Things (IoT), cloud computing, and blockchain technologies.
However, AI in financial services has changed the course of banking and financial services. Artificial intelligence has helped organizations boost their bottom line by streamlining programs and procedures, automating repetitive jobs, and improving customer service. According to Business Insider, will save banks and financial organizations $447 billion by 2023.
AI technologies can increase revenues by providing customers (and employees) with more personalized services. They can also reduce costs through improved resource utilization, increased automation, and reduced error rates. Finally, AI in banking industries can help businesses discover new, untapped opportunities.
Additionally, banks have continuously changed how their consumers engage with them over the years by incorporating the newest technological advancements. In the 1960s and 1970s, banks introduced ATMs and automatic card-based payments. The widespread use of 24-hour internet banking began in the 2000s, and in the 2010s, mobile-based “banking on the go” began to catch on. Hence with the change in technology, banks, and financial sectors have brought or transformed themselves as required.
Artificial intelligence is well suited to the banking industry. After all, banks are information businesses with terabytes of data, and AI depends on data to function. As predicted, if correctly implemented in the upcoming five to seven years, AI may boost bank revenues by as much as 30% while potentially cutting costs by as much as 25%.
Banks must have a comprehensive strategy to overcome the obstacles preventing the organization-wide implementation of AI technologies. To drive AI technology, banks must invest in transforming capabilities like enhancing data assets, scaling infrastructure to allow for widespread experimentation, and recruiting staff to scout for new AI use cases. Furthermore, by exploring how AI can help customers in ways other than providing traditional digital banking solutions.
The volume of data that contains private and sensitive information necessitates implementing additional security measures, which is one of the primary issues facing AI in financial services. Second, the financial services sector places a premium on localization. Financial organizations frequently need to create models with the multiple markets they serve in mind. It’s crucial to consider the challenges of AI in financial services across diverse languages, cultures, and demographics to adapt to the client experience.
Only when clients are informed, convinced, and confident in AI models can they be effective in making accurate predictions. Customers will want to be satisfied that their personal information is being carefully collected, processed, and preserved because it will likely be used to develop these models. Last but not least, using siloed data requires connecting dozens of different parts of the data pipeline and integrating numerous APIs, all while balancing security and compliance issues. For a financial institution to accomplish this effectively, it must make sure that the data they have access is accurately gathered and organized and that the information enables machine learning models to anticipate in accordance with the business objectives specified in the AI program.
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Everyone agrees that artificial intelligence in banking will significantly change the sector during the next five years. This is due to the significant gap created by finite human capacities. A closer examination reveals the disruptive potential of AI, which will go well beyond banking, fundamentally alter the digital customer experience, and even give humans superhuman abilities. Banks gather a lot of information on their clients, but advanced technology is needed to exploit this data fully. This might be the key to resolving client problems and satisfying their requirements and wants.
Future through AI-financial service banks will benefit from the speed and agility that already distinguish digital-native businesses. The AI-technology institution will internally be optimized for operational efficiency through excessive automation of manual chores (a “zero-ops” philosophy) and the replacement or augmentation of human decisions with powerful diagnostic engines in various bank operations. It will innovate quickly, introducing new features in days or weeks instead of months. It will work closely with partners to deliver new value propositions that are seamlessly integrated across journeys, technology platforms, and data sets.
We can only conjecture about AI’s real potential because it is incalculable. Future market dominance will go to businesses that can humanize AI and use its potential to address people’s issues. Businesses collaborate closely with UX (user experience) architects to provide entirely new experiences by fusing technical developments and advancements with user experience understanding.
In a poll of senior IT decision-makers in the financial services industry, Foundry4 reports that 65% of them expect to employ machine learning to evaluate unstructured data within the next one to two years. Additionally, 15% more people stated that they intended to follow suit in the following three to four years.
This is a positive progression. A flexible approach to innovation and new technologies will be a major selling feature for many customers in the future as the market changes quickly. Additionally, it will contribute to a rise in consumer confidence in financial institutions.
The leading actors in the financial services industry should ultimately try to promote this activity by continuing to use innovative methods to put these new insights into practice. IT solution for finance industries is being become increasingly advanced and to be in such a ruthless battle of providing advanced services financial sector need to move as the wind surge. Nevertheless, such technology is truly becoming a boon to the finance sector as it is leveraging benefits for both customers as well as for financial organizations.
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