We are going Digital. There is no second opinion about the fact that people are inclining towards a Digital Transformation. Think about how much things have changed around you. The DX has created an information society around us. Now think about how much tech-savvy have you become since the arrival of advanced technologies. We are experiencing ground-breaking innovation, which doesn’t mean we are just the spectators; we are the part of innovation.
Artificial Intelligence is the most transformative technology present today, and his blog will tell you how it is needed in the Banking and Financial sector only for advancement. While previously, this transformation was expected to be slow, COVID-19 has turned the tables for industries, and banking is no different. According to statistics, the data suggests that the potential cost savings for banks through AI applications is approximately estimated at $447 billion by the year 2023.
Why Banks and Financial Institutions must adopt AI?
Big Data and Advanced Analytics are two most fertile ground that AI holds over. Since Banking and finance is a sector that heavily deals with Big Data, Ai can be useful to change the business model for the future. However, there are various advantages that prove why AI adoption is beneficial for Banking and Financial service.
- Increase in Digital Interaction- In the times when people need quick solutions for their problems, the internet is a boon and since the pandemic banks are experiencing higher online traffic through internet banking and digital banking services. The need of the consumer has remained the same, however, they need efficient and effective results. In this case, it is essential for banks to abide by the demand of its consumers and digitize their business model accordingly. AI can be the right solution for enhancing the experience.
- Competitive advantage against other institutions- Financial Institutions are quick to adopt newer technologies and improving customer experience. You don’t want to lag behind and lose customers. While some institutions are still holding up trails and implementing AI to face customers for particular cases like AI assistance, investment banking predictions etc., other institutions are diving in and proving a complete AI experience in front-end and back-end.
- Digital ecosystems challenging traditional models- Since the requirements are changing vigorously, and consumers are embracing new technology rapidly; financial institutions should develop a model that displays their very best. Identification, Authentication, Personalization, thus maintaining customer relationships, are some of the more significant benefits you can offer to your customers by switching to AI.
- Cognitive Process Automation- Artificial Intelligence is known to back up the existing structure of the Financial Sector. Management is huge a department that Banking and Financial Services lacks in. It automates various tasks that otherwise need manual labour, which is costly, time-consuming, and tedious. Constant Machine Learning ensures ROI on behalf of the institution.
While Banks are still in their experimental stage, it is expected to acquire some positive virtues. Banks are also deploying Artificial Intelligence to detect and check payments fraud and refine anti-money laundering processes and layout know-your-customer (KYC) regulatory.
There’s a growing understanding that AI isn’t just about lowering costs but has an equally important role to play in successfully doing all the things that help you improve revenue, such as improving relationships with clients, making new contributions to innovation efforts, and more. That’s a big reason we believe what’s going on in banking has lessons that are more broadly applicable to those in other industries.”- Alex Kwiatkowski, a senior industry consultant for the SAS global banking practice.
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