How Is Artificial Intelligence Used in Banking?

Artificial Intelligence is everywhere nowadays. You probably use it at least a few times each week, without even realizing it. For example, if you recently used your smartphone to request some information from a company, there’s a big chance that an AI powered chatbot answered your questions.

As you can see, Artificial Intelligence already plays an important role in the banking industry. As technologies keep evolving, AI will no doubt keep being used to help customers and banks save a lot of time and money, and to facilitate their daily transactions.

Chatbots, and Artificial Intelligence in general, are useful to many industries, including the financial industry. The banking chatbot technology improves productivity, and improve the experience of customers.

How is artificial intelligence used in banking exactly? Let’s take a closer look:

1. Chatbots help provide good customer service

Providing customer service is a common reason why artificial intelligence is used in banking. Chatbots are automated chat programs that are powered by Artificial Intelligence. Unlike humans who work for banks, chatbots are available 24/7 to provide bank customers with useful information and assistance, to answer their questions, or to present them with special offers.

Of course, chatbots are not able to resolve complex issues, and the customers will have to be referred to a human employee in some situations.

But since they are always available and ready to help, chatbots are an easy way for banks to improve the quality of their customer service, and to please customers who are looking for convenience, and prefer chatting to talking on the phone.

2. Artificial Intelligence helps customers with simple tasks

Artificial Intelligence can also improve a bank’s customer service by assisting customers with some simple tasks.

When a customer visits a bank’s website and logs into their account, a virtual assistant can offer them some help if they are not sure how to check their balance, how to pay a bill, or how to transfer money to another account.

Whenever an operation is too complex to be handled with the help of AI, the customer will automatically be connected to a human customer service representative. However, by taking care of simple operations, AI helps reduce the workload of human employees, who can then focus on the more difficult part of their jobs.

3. AI helps reduce human errors

In the banking industry, a small mistake can end up being very costly. Therefore, by reducing or eliminating the risk of human errors, AI can make it possible for banks to save a lot of money.

AI will not omit a number, write it in the wrong column, or inadvertently add a few zeros to an amount during a transaction. It could even be able to detect errors made by humans, and to fix them.

When computers can automate many processes, make calculations, and handle sensitive data, human employees can focus on other tasks that only them can do.

4. AI helps review loan applications to minimize risks

Banks have to manually review all of the loan applications they receive, to ensure they will only loan money to customers who meet the necessary requirements, and will pose no risk to them. This process can take a lot of time.

By using an AI powered system to review and screen their loan applications, banks have a reliable way to assess potential financial risks, and to avoid any form of discrimination.

The loan applications that meet all the requirements can then be transferred to an expert, who will review them one last time before moving forward with the loan process.

5. AI allows banks to improve their fraud detection methods

Artificial Intelligence can also be used by banks to improve their fraud detection methods. Indeed, AI can easily recognize unusual or suspicious transactions, and report them to the bank authorities so they can resolve the situation as quickly as possible.

Thanks to machine learning, AI can study the behaviours of each customer, which allows it to notice any strange operation immediately. The effectiveness of fraud detection can only improve over time, which is a great benefit for banks as well as for customers who want their accounts to be kept safe.

AI can also be trained to recognize and prevent money laundering, which could save huge sums of money each year.

6. AI can recommend the best investment opportunities

Banks can invest money in different ventures with the goal of becoming more profitable. With the use of algorithms, AI can recommend them some of the best investment opportunities so they won’t risk loosing money in risky ventures.

Of course, AI can also help a bank’s customers invest their money, so they can be more confident about building their own investment portfolio. AI will look for opportunities that meet their requirements, and will recommend them the ones that come with the amount of risk each customer is willing and able to take.

By helping banks and individuals make better investments, AI is helping them earn more profit.