The financial industry has been implementing various emerging technologies like Quantum computing blockchain, and open banking to better their services. Artificial Intelligence (AI) is the latest tech and is expected to change the banking sector. With computers programmed to perform complex tasks, in the near future, machines will handle more work in banks than humans.
Although AI technology isn’t extensively implemented, it has shown potential if adopted fully. Also, a lot of ongoing research aims to improve the technology to suit the current and future banking requirements.
To understand AI impacts in the financial sector, check how banks use it to enhance customer experience.
Understanding AI Technologies
Artificial Intelligence is a technology that trains machines like computers and robots to perform tasks traditionally done only by humans. It aims at making computers behave and act like human beings. The rise of AI technology began in the 1950s and has seen tremendous improvement. It’s applied in fields like Health, finance, robotics, e-commerce, and others. The use of AI in Banking is an exciting advancement in the financial sector due to its many benefits.
How is AI Enhancing Customer Experience in the Banking Sector?
By integrating AI into the banking sector, banks provide excellent customer experience. It gives customers better services, more revenue, and attractiveness to new customers. The following are some of the ways banks improve customer experience.
1. Improved Customer Support and Communication
One way that banks are utilizing artificial Intelligence is by providing efficient customer support and communication. Traditionally, banks employed hundreds of people in their call centers to deal with various jobs like assisting customers via telephones and making promotional calls. However, these days, the trend is changing as more banks are adopting the use of chatbots.
Chatbots are computer software capable of human-like conversations through natural language processing (NLP) technology. They are programmed to recognize conversation through writing or speaking, making them handy tools for banks. Through these bots, financial institutions can cut the staff needed in customer care departments. The ability to customize bots makes them usable on different platforms like answering telephones, social media and other communication channels.
Besides offering support, these AI software are also helpful in cutting the response time. Whether you contact a bank day or night, chatbots are available round the clock, unlike humans. With instant replies, customers enjoy excellent solutions to their problems as opposed to when waiting for hours.
Amazingly, the advancement of these software enables them to offer more than calls and message replies. They can check bank balances, transfer money and other processes that previously needed human intervention. Advanced bots are even customized to offer financial advice to customers by analyzing their past banking trends.
2. Enhanced Fraud protection
Fraud remains one of the most challenging threats in the banking industry. Detecting and preventing it is a big challenge that requires a combination of approaches. Banks nowadays are using AI technology to improve fraud detection and customer protection. Usually, they use data mining to gather customers’ general banking behaviors based on past transactions. The data is used to set the customer limits, and when breached, a red flag is triggered, promoting automatic security measures engagement.
Another way that AI is improving fraud protection is through authenticating customers using voice, fingerprints and iris. Using sounds and other biometric data to access bank services has proved effective in countering fraud. The accuracy of these systems ensures there is no chance for errors. Utilizing biometric means as security features have significantly reduced fraudulent activities in the banking sector. To prevent any breach, banks use AI technology to prevent voice phishing.
Integrating AI in push notifications technology has also seen customers enjoy safe banking services. The push notifications let customers know when there is any activity in their bank accounts or credit cards. Instant notifications help block unauthorized transactions, preventing customers from losing their money.
3. AI Assists in Credit Assessment and Risk Management
Banks are adopting artificial Intelligence to perform credit assessments and risk mitigations to enhance customer experience. Relying on the traditional ways of assessing customers’ creditworthiness isn’t sufficient these days since it’s time-consuming. AI technology has proved effective since banks perform quick and accurate assessments, saving time and giving customers a premium quality experience.
Since AI can handle a large amount of data, getting essential real-time insights about customers’ behavior and other related information is easy. Instead of traditional legacy-based rules, AI offers a fast and thorough analysis, eliminating delays. Therefore, if a customer requires a loan, it takes less time to process based on the results generated by AI software.
Apart from determining the customer’s credit scores, these technologies are also crucial in assisting banks to assess customer risk levels. The ability of AI technologies to be configured to suit the bank’s needs enables accurate assessment since they can merge client data from different sources. As a result, the technology assists banks in making decisions based on the generated information.
4. Reduction of Service Cost
Artificial Intelligence has enabled banks and financial institutions to smoothen operations such as revenue collection while keeping operation costs low. AI-powered technologies like chatbots and virtual assistants have reduced the need for costly human resources.
Instead of maintaining large customer service teams that operate around the clock, banks are now deploying AI solutions that can handle thousands of customer queries simultaneously, substantially lowering operational costs. A report shows that banks are now 2-5 times faster using AI tools.
The use of artificial Intelligence to perform complex tasks like transaction verifications, traditionally handled by humans, has improved the customers’ experience. Additionally, most of the services are automated nowadays, which has significantly helped cut the number of staff needed. Automation has seen service fees scrapped. Nowadays, you can check your balance and deposit money through mobile banking without experiencing service fees.
Besides reducing charges for automated processes, AI has also reduced the staff needed during loan processing. Loans managers can use AI tools to assess, analyze and predict customers’ banking behaviors with a button click. This makes it quick and cheaper than using traditional means. Accessing this information is beneficial to banks and customers in mitigating the risks while providing seamless services.
Like other emerging technologies, AI is expected to bring many changes in the banking industry. Specifically, the interaction between banks and customers will get a significant boost to ensure seamless and exceptional service delivery. The slight bit of AI technology already deployed by banks shows impressive results, meaning full adoption will create outstanding customer enhancement.