Sameer is overjoyed when his daughter gets admission to a dream university. However, he realises that he has to arrange a fairly large amount of funds quickly. Sameer browses his bank’s website aided by a friendly chatbot, calls up the call centre where a virtual assistant arranges for a sales officer to visit him and help apply for a loan on a tablet, and obtain immediate approvals based on an automated credit scoring system. All of Sameer’s banking interactions were assisted by Artificial Intelligence (AI) that is empowering banks to make customer lives simpler and easier.

AI is not one single application. It is more a salad bowl of different technology based tools to execute tasks that require a human level of perception, quickly and error-free. It may seem simple for your friendly neighbourhood banker to recognise you as you step in to a branch; it would take the combined power of voice and facial recognition technology, natural language processing and other AI processes before a robot can call you by your name as you enter the bank.

Global spending across industries on artificial intelligence is expected to reach about $20 billion (Dh73.46 billion) in 2018 and to triple over the next three years. The UAE too is a keen adopter of new technology with the country’s artificial intelligence strategy targeting a contribution by AI of Dh350 billion (or 14 per cent of GDP) by 2030.

Bots, chatbots and robots

For customers, technology is powering everyday interactions with the bank, whether or not they realise it. Banks use AI to automate processes, interact with customers, build intelligent and real time lending models and enhance fraud-related monitoring, among other things.

Rule-based ‘bots’ help banks carry out repetitive tasks at the back end such as sifting through a wide set of documents to fetch data instantly or to automate simple processes. Chatbots are text or voice based assistants that help customers engage with banks any time of day or night and obtain information or help. Whether it Bank of America’s Erica, HSBC’s Amy or Emirates NBD’s Eva, chatbots help customers cut through time consuming layers and access the information they want immediately. They also act as the customer’s financial wing-man in helping to monitor spends and ensure optimal money management.

Robo-advisers are an important area of AI application in financial services where digital platforms powered by fintechs provide round-the-clock automated investments and algorithm-driven financial planning with little to no human supervision. Not only are these platforms much less expensive than traditional fund managers, making them accessible to a wide section of customers, they also avoid human emotions like fear and greed in investing decisions. Starting with Betterment, the first robo-adviser that was launched in 2008 in the US, to Upwardly, the wealth management platform in India that provides goal-based online investing across hundreds of cities, there are over 400 platforms available today across the world.

In the UAE, Sarwa (meaning wealth in Arabic) is the first authorised robo-advisory firm that has commenced operations. Robo-advisers today manage over $200 billion of customer assets worldwide, expected to reach $2 trillion by 2020.

Other uses of AI in banking include fraud detection, increased customer personalisation, enhanced governance, as well as physical robots such as Emirates NBD’s Pepper that welcomes customers with a bow and ‘Salaam-Alaikum’ at our futuristic branch at Emirates Towers, Dubai.

AI-ded banking

Continued advances in technology and changing customer profiles are driving the pace of growth of digitisation and AI in banking. Customer acceptance of AI-based solutions is climbing steadily supported also by data-related regulations coming into force allaying concerns on privacy and security.

In Sweden, Nordea Bank replaced 8 per cent of their staff last year, using machine learning to deliver services as varied as asset management and answering client calls. Citibank has recently warned that it could shed half of its 20,000 technology and operations staff in the next five years due to the rise of robotics and automation. Much like when computers started to make a foray in the 1990s, the roles of bankers are undergoing a change.

Such is the perceived potential of AI that “invisible banking” has been predicted by some as the future. However, the future of banking is not simply a matter of choosing a robot over a human being. Instead, value-added and personalised service delivered by bankers empowered with a broad set of digital technology tools will help provide a superior banking experience to customers.

Suvo Sarkar is the senior executive vice-president & group head of Retail Banking & Wealth Management at Emirates NBD.