AI can change the face of the banking sector while reducing costs, increasing employees’ efficiency and more.
Like the expectations of employees, customers’ expectations have also evolved over a period who now look for more personalized services at a competitive cost.
There has been an interesting shift in the workforce over the years. Employees in any industry do not work just for money but they strive for work-life balance and a conducive work environment. It cannot be argued that a happy employee keeps the customer even happier. The situation is no different in the banking sector. And like the expectations of employees, customers’ expectations have also evolved over a period who now look for more personalized services at a competitive cost.
What does this mean?
This means that employers need to be proactive and create a work environment that reduces undue stress by eliminating employees’ involvement in repetitive or template-based tasks. This is where Artificial Intelligence (AI) comes into a picture. AI or machines that are capable of performing specific tasks normally requiring human intelligence, can help employees focus on tasks of greater value while reducing chances of human error and increasing overall productivity.
AI has the capability to do many hats :-
- Sense and perceive the world by acquiring and processing images, sounds and speech.
- Analyse and understand the information collected by adding meanings and insights.
- Act based on comprehension and understanding
- Learn based on real life experiences and improve performances
AI and Banking
In the banking space, the use of AI is crucial at every stage—in lending, customer service, fraud protection, employee management/training/hiring, and more.
A sneak peek into the use of AI in Banking:
People: Productivity and efficiency of the workforce can be enhanced with the use of AI tools like a chat-bot or a Virtual Assistant that can simulate a conversation with a user in natural language through messaging applications, websites or mobile apps. In Banking, chat-bots can be used for customer support and help in increasing efficiency and enhancing customer experience while reducing costs.
Product: Customised products can be offered to customers by using technology to analyse historical data, understand risk appetite, income profile etc. This would make the process objective and reduce the risk of human errors. Personalized portfolios can be managed by an AI software like Bot Advisor, which does not have any vested interest and are capable of intelligently managing personalised portfolios while ensuring higher volumes than humans.
Process Automation: Smart and intelligent automation can help the humans get rid of the repetitive tasks and they can focus on providing more personalised services requiring a human interface. The tools like OCR or Optical Character Recognition can capture data with which the machine learning software can generate insights, reducing the back-office processing effort.
Data Security: Banks are custodians of large amount of data that can be used to generate insights into the lives of their customers, their spending habits/patterns. Analytics can be used to analyse the data and develop tailor-made products and services for customers. Also, AI tools can be used to keep a check on suspicious behaviour and dubious emails to prevent security breaches.
In simple words, AI can help banks reach potential clients more easily, develop smarter products, build better relationships, enhance customer experience and improve service delivery, thereby fuelling growth in business and reduction in costs.
Is a threat of job losses due to AI well-founded?
It is often feared that the adoption of AI would hurt the creation of job opportunities. Automation is not synonymous with job cuts but with skill enhancement. There can be a little slowdown in job creation in banks but at the same time, there would be jobs at different levels. For example; banks need to approach customers and make them aware about the financial products. Besides, there would be an increased requirement of data scientists and a sea of opportunities for digital entrepreneurs.
In fact, a data by a leading research firm suggests that 77 percent of the banks plan to use AI to automate tasks to a large extent in the next few years with the majority of them believing that the AI would result in job creation.
The Final Word!
If the human resources are provided adequate training in using the AI tools and structured mechanisms for collecting and validating data are put in place, AI can change the face of the banking sector while reducing costs, increasing employees’ efficiency and generating better experiences for customers.
—By Virender Jeet, Senior VP – Sales & Marketing (Products), Newgen Software.