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What’s the Value of AI in the Banking Sector?

September 10, 2020 • Shannon Flynn

Artificial intelligence has the potential to change the face of business in nearly every industry. Whether you realize it or not, this technology is already seeing widespread adoption in companies of all kinds. One of the most promising instances of this trend is the implementation of AI in the banking sector.

You may have never considered how AI can help the banking sector, but banks sure have. According to one poll, 75% of large banks and 46% of smaller ones are currently implementing AI. So why are these institutions flocking to this technology?

AI can help the banking industry in four main areas: security, data analytics, customer service and process automation. These are all essential to a bank’s success, and AI improves them all.

Security

It should come as no surprise that security is one of a bank’s leading concerns. When you’re handling other people’s money, ensuring it’s safe is a priority, but that can be challenging in a digital age. AI can provide the tools necessary to identify and prevent security issues within a bank’s operations.

USAA uses AI to analyze their customers’ behavior so that it can recognize any suspicious activity. This AI can then alert users or freeze accounts if they detect fraud, keeping their assets safe. Since AI is typically better at making these kinds of connections than people, it’s better at this kind of security.

Big Data Analytics

AI in the banking sector can also improve another business buzzword: big data. Big data analytics helps banks make decisions like targeting new markets or fixing inefficiencies in their operations. Making sense of vast data pools can be challenging, though, at least for a person.

As mentioned earlier, AI is excellent at finding connections between points that people may miss. This advantage makes these systems ideal for processing big data and producing actionable insights. With AI-powered data analysis, banks can make more informed decisions faster.

Customer Service

In an increasingly digital world, digital customer service options are becoming a more crucial feature for any business. AI features like natural language processing (NLP) enable reliable chatbots, a cornerstone of digital customer service. By turning to chatbots, banks can offer 24-hour service without needing to overwork busy employees.

More than 90% of Americans use online banking already, so chatbots are an ideal way to communicate with banks’ customers. Customers can get answers from chatbots anywhere at any time on online banking services. As AI improves, these bots get better at answering people’s questions too.

Process Automation

Banking involves lots of repetitive paperwork, which can take time away from already busy employees. This kind of work can hinder employee productivity, but AI can take it over for them. Not only that, but AI can accomplish this work faster than a human worker.

Generally speaking, AI systems are the better choice for work that’s repetitive or data-heavy. Typical bank processes like generating reports, customer onboarding, account opening and loan processing happen to be both. By assigning these tasks to AI, banks can finish them faster and free employees to focus on more important work.

AI Is the Future of the Banking Sector

These examples just scratch the surface of what AI in the banking sector can do. Both banks and their customers will benefit from further implementation of this disruptive technology. Banks are aware of this potential, too, as more of them are starting to adopt AI in more areas.

Banks have never been shy about adopting new technology, and it’s no different with AI. If these trends continue, it won’t be long before AI in banking becomes an industry standard. It’s already getting close.

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