The impact of AI in the Fintech industries continues to increase amid the strong attention from major players, for good. AI has produced some good use cases and examples where they have benefitted the banks, ranging from the banking chatbots to smart contracts.
All these financial institutions are well aware of the fact that AI-enabled apps and tools can save them in billions by the end of coming five years or so. A round estimate by few of them says $447 billion by the end of 2023. While a lot of tools are still in the process of the development stage right now, they’re poised to change the way banking is being done and the communication between people and the banks.
Here’s the thing, the monetary transactions are nothing but an exchange of information across these networks, which means that technology is the way to go to make it more meaningful and secure at the same time. And hence, it makes total sense to introduce AI in the global financial industry because it’s a world filled with technology and networks.
The applications of the products are already in play and continue to grow and develop. Some of these are:
- Chatbots – Chatbots are nothing but personal electronic assistants that potray the human behavior and assist it’s customer with the offerings that banks and other institutions have for them. The purpose of AI-powered chatbots here is to provide clients with helpful answers without them having to visit a branch. A chatbot should ideally help the clients with all the necessary functions in the banking ie. Sending and receiving money, changes in credit score, generate and monitor electronic bills, locking and unlocking cards, insights on funds, trading in foreign currencies etc.
- Personalization of banking services – AI is poised to promise a great personalisation experience of the customers. Most customers expect personalised experiences with all businesses, including the banks. For example, let’s say a customer applies for mortgage. Now, customers would want to see improvements in the process and that’s where AI comes into the picture. It processes the data quickly and enhances the time consuming parts of the process. AI will not only benefit the customer but also the banks with selecting the mortgage recommendations based on the needs of clients.
- Online Fraud Detection: We see cybercrimes increasing day by day as the cyber criminals are getting smarter and finding new and developing sophisticated tools to attempt fraud. AI has the ability to detect fraud by sensing suspicious behavior patterns. The algorithm is able to define, understand, and anticipate certain behaviors during the financial transaction. As FinTech companies continue to improve AI-enabled online fraud detection, they’re becoming closer to a type of software able to handle a continuous stream of incoming customer data in real time.
Today, fintech encompasses everything from customer service chatbots and machine learning algorithms for fraud analytics to blockchain for digital transactions and biometrics-enabled authentication. Increasingly, retail banks are being upstaged by new fintech players that offer customers all of this and more, making it imperative for traditional banks to make strategic investments in innovative technologies. This will help them upgrade their operations and deliver seamless services for higher customer retention.