BANKING TIPS: Why banks need artificial intelligence

What you need to know:

  • Even though the purpose of these intelligent machines is to replace human intelligence to a certain extent, employees of banks have nothing to worry about as the industry still needs human interaction to serve the customer exceptionally.

Last week I shared that Artificial Intelligence (AI), which has an immense potential for the banking sector.

Banks seek to gain a competitive edge over their peers by implementing advanced technology to achieve improvement in speed, accuracy, cost efficiency and meets customer needs.

Much of the expectation surrounds the ability of machines to replicate, and often exceed, what human beings are able to do in banking.

Even though the purpose of these intelligent machines is to replace human intelligence to a certain extent, employees of banks have nothing to worry about as the industry still needs human interaction to serve the customer exceptionally.

AI is being used to address a wide range of challenges by making interactions between machines and systems simpler and smarter across all industries, but the adoption of AI systems in the banking industry is limited to date because of the important element of human interaction needed in providing services in the banking industry.

Additionally, I shared that with money laundering, continuing to be a persistent problem for banks, AI can assist banks in combating this threat through advanced data analytics systems to save the banks from being fined more frequently due to inadequacies in their anti-money laundering infrastructures. This week is a continuation of last week’s article. In this article, I will share a few more examples of how AI can impact the banking industry.

Enhances customer service experience

Customer experience is one of the areas that can be enhanced through AI as quick support can be easily provided to the customer along with tailored banking products according to his/her needs.

Based on past dealings and data (detailed customer’s demographics and records of online and offline transactions), AI can develop a better understanding of customers and their behaviour. This enables banks to customize financial products and services by adding personalized features and intuitive interactions to deliver meaningful customer engagement and build strong relationships with their customers. One form of AI that helps banks tremendously is Chatbots. Chatbots are automated service assistants that provide customers with the convenience of resolving their queries via an online messaging system instead of having to visit a branch. Chatbots offer efficient, systematic and accurate conversations which lead to a great customer service experience.

In addition, as technology evolves, AI has been able to offer voice bots as well to solve customer’s issues without human intervention.

Enhances mobile banking apps

To meet today’s customer expectations, most of the banks are shifting more into offering digital services and products which have resulted in millions and millions of transactions being done online irrespective of time and place worldwide.

AI can be integrated into the bank’s mobile apps to improve customer service. How? After gathering the customer’s data from the mobile device, the AI system incorporated in mobile apps processes the data to understand the customer’s behaviour to provide the relevant information – services and offers in line with the customer’s needs.

Also, the mobile app with AI will assist the customers when it comes to personalized planning. For example, if a customer wants to buy a new house, the mobile app can guide the customer with budget and other related details to help the customer achieve that goal. In conclusion, AI has many benefits to offer for the banking industry. I shared that AI is being used to address a wide range of challenges across all industries, but the adoption of AI systems in the banking industry is limited to date mainly due the important element of human interaction in providing banking services.

The past two weeks I shared how AI can impact banks: AI brings the power of advanced data analytics systems to combat fraudulent transactions.

and improve compliance; AI combines the personal data provided by a prospective borrower with market trends, his/her most recent financial activities and transactions to identify the potential risks in giving out the loan to the prospective borrower; AI can develop a better understanding of customers based on their past dealings and their behavior to enhance customer experience; and AI can be incorporated into banks mobile apps to improve customer experience on mobile/internet banking platforms.

Mr Mkwawa is a seasoned banker