OPN Artificial Intelligence
Banking services are already being built around AI or aspects of it. Now, banks need to power up on these deployments. Image Credit: Shutterstock

Over the past decade, tech advancements - from the Internet to the Internet of Things (IoT) - have evolved the way we live and work. If current trends are taken into consideration, by the looks of it, almost everything from here on will be driven by AI.

While adoption of AI in businesses is inevitable, the conversation has pivoted toward its proper usage and impact. Within banking, a sector heavily focused on customer services, AI technologies are already delivering promising results. Be it chatbots, robo-advisors, fraud detection algorithms, etc., these tools are taking the sector to a realm beyond digitization as we know it.

We are moving away from merely building products and services to creating superlative CX (customer experiences). Not just impact, deploying AI also has the capacity to deliver tangible value. For instance, according to a McKinsey report, AI’s potential real value in the GCC stands at approximately $150 billion.

Transforming banking for the next-gen customers

The global banking sector is increasing its adoption of AI tools to fulfil its goal of offering a frictionless customer experience. What is noteworthy in the larger scheme of things is that these have been instrumental in providing a win-win for all parties involved. For instance, banks are catering to an increasing number of Millennials and GenZs – cohorts that tend to seek more personalised services.

With AI, the Banking, Financial Services and Insurance (BFSI) industry is being able to deliver a CX tailored to customer preferences. AI-powered interactive interfaces have helped improve the turnaround time, efficiency, and further personalisation of banking services, without compromising on the quality.

Chatbots for instance serve as an excellent medium to help customers engage with banks and obtain information or help anytime, they need it. The reason such AI tools have clicked well is that they help cut through time-consuming processes and access the information they want immediately. It is no surprise then chatbots are predicted to witness a 3,000 per cent growth between 2019-23.

Banks are implementing automation platforms that integrate emerging technologies such as robotic process automation (RPA), AI, machine learning (ML), and cognitive capabilities. Through this, banks are creating custom interfaces that work in their favour, enhancing human-robot interactivity as well as adaptive positioning technology.

On the other side of the winning scale, as AI interventions continues to automate most routine processes, they are rewarding banks with cost-effectiveness to banks. Reports have shown that the collective potential of cost savings for banks from AI applications could be $447 billion by 2023, with the front- and middle-office accounting for $416 billion. Additionally, findings of Juniper Research indicate banks using chatbots will be saving as much as $7.3 billion this year.

For several banks, upgrading with AI tech is a milestone to becoming fully digitalised and enabling them to cater to the growing digital customer base while gaining strategic competitive advantage. However, a bank’s AI journey is incomplete without training employees in clearly defining the fundamentals of apps and the ethics of using them diligently.

Progressive global banks are already pioneering this effort by embracing a novel concept digital workers into their workforce, ensuring a holistic approach to AI implementation.

AI-enabled banking future

AI is at the core of Industry 4.0, and it is changing the way we live and work. An IDC report shows that almost 85 per cent of banks implemented AI applications with an intention to enable intelligent decisions and automated processes for corporate know-your-customer (KYC) procedures.

Contrary to popular debate, the future of banking is not merely about choosing a robot over a human resource. The real deal is to harness the potential of AI-powered tools to provide a superior customer experience.

Introduction of newer and better AI technologies into the market will only deepen the ongoing revamping process in the industry. Against this backdrop, AI’s ability to enhance efficiency, improve customer experiences, and mitigate risks cannot be underestimated.