We still haven’t achieved a digital world close to the level of the future we imagined through Matrix, the movie. But we’ve come far. We came further than we imagined the reality would take us. Artificial intelligence is part of every single business, and it drives the world forward.
The banking sector is not immune to progress. In fact, we’re seeing banks and credit unions using technology that’s more advanced than ever. They implement it in website development, email marketing campaign, digital advertising, and all other aspects that have to do with personalizing a consumer’s experience.
The Banking System Survey 2017/2018 showed that internal resources are getting more important for banks. They are employing more IT technicians than ever. In 2017, IT employees reached an average of 25% of all staff in banks.
But how exactly is artificial intelligence being implemented in the banking industry? We’re yet to see some big progress. We’ll list 5 important applications of AI in banking, which we’ll most likely witness throughout the next five years.
1. Predictive Analytics
This is getting big. Dutch banking service provider ING developed a revolutionary tool called Katana. It’s a predictive analytics tool that helps traders to quote a better price when selling and buying bonds for their clients. Katana uses real-time and historical data to deliver precise information.
The results of the testing were very successful. As ING informed at its website, the implementation of the tool led to faster pricing decisions for 90% of trades, and a 25% reduction in trading cost. As a result, the traders were able to offer the best price for their clients.
Lauren Smith, a marketing expert from Essay On Time, acknowledges another aspect to predictive analytics: “Tools like Katana help banking service providers to promote themselves. For the banking industry, marketing is not about keywords, guest blogging, and SEO. It’s about developing tools that the consumers need, and promoting them as ING does.”
It’s no wonder why we’re seeing an increased number of banks sharing more articles with their audiences. They don’t have to hire writers as part of their staff. They rely on high-quality writing services like EduGeeksClub and A-Writer.com to share the news regarding artificial intelligence in their practices.
2. Recommendation Engines
Personalized customer experience is one of the key contributions of AI to any sector. In the banking sector, the system learns from the user’s behavior. Based on the previous actions, it can recommend appropriate investment strategies, credit card plans, and make other offers that would save the user a lot of time browsing through the website. In addition, the system makes the bank’s employees more effective in recommending appropriate plans.
Artificial intelligence will play an important role in how recommendations are made in the future. Big data is only getting bigger, and it’s finding its true purpose in recommendation engines.
3. Fraud Detection and Prevention
With the rise of artificial intelligence, banks got a major boost in their efforts to deliver a safe experience to their customers. The majority of the top banks rely on the FICO Falcon fraud assessment system, based on cognitive fraud analytics.
Based on self-learning artificial technology and real-time behavioral profiling, the system can detect suspicious behavior and prevent frauds. These types of systems haven’t reached their full potential yet. We’ll see them grow stronger and more reliable.
4. Gaining Competitive Advantage
“What are the main reasons behind your organization’s plans to invest in technology over the coming three years?” That’s a question from the Global Banking Outlook 2018. 70% of the respondents pointed out the need to strengthen competitive positioning and build market share as their priority. 67% responded with “expandability to acquire, engage and retail customers.”
We’re finally seeing banks moving away from the regulatory-driven, institutional status. They are becoming companies that are ready for transformation. Their marketing efforts are no longer based on hiring writers from Essays On Time to complete content for their websites. They are becoming digitally mature. They use AI software to learn what their target audiences need and to develop products that would really get their attention among the competition.
Chatbots are another aspect of AI that banks use to gain competitive advantage. They are AI-based chat systems that simulate conversations between the customers and the bank without any human customer service representatives involved. In the future, chatbots will get more advanced. They are even expected to detect the mood of the user and react accordingly.
The implementation of AI for improved marketing doesn’t stop there. Banks can also use technology for smart content curation, reaching people who use voice search, lead scoring, ad targeting, and more.
5. HR Management
Hiring the right people in the HR department is always a struggle. These are the employees who hunt for talent to fill in positions in all departments. In addition, they have to care about onboarding and analyzing big data. But with the implementation of HR tech, their job is much simpler and these departments are getting smaller.
The program enables the HR department to handle leave management, track overtime and perform other tasks in the timesheet, schedule shifts in the easiest way possible, and manage expenses from mobile. The programs cover the aspects of onboarding and reporting, too. Many HR processes are now being automated, and this element of AI is only going to get bigger in the banking sector.
Banks will make the most out of AI
That’s something we can claim for sure. Why? – Because banks have no other choice. Artificial intelligence makes them more effective, and it makes everyone’s job easier. Plus, the competition leaves no space for doubt. Big banks are already using sophisticated AI. They have in-house teams of talented data scientists and other technicians who consistently develop new technology.
Small banks currently limit the use of AI for improving customer relations and improving operational efficiency. However, we’re going to see big progress there over the next years.