Artificial intelligence and machine learning have been the source of many futuristic science fiction movies. However, as IBM’s Watson showed the world when it competed on Jeopardy, AI and machine learning have not only arrived, but they can also serve an important purpose in our everyday lives. Take the banking industry, for example. Slow to adapt to technological changes before the worldwide crash of 2008, banking institutions have started to become foremost adopters of cutting edge technology. This is due to a few factors, but most specifically, a higher level of expectations both from customers and from federal governments. Let’s take a look at a few instances of this:
Quelling Fraud Fears Through AI
With so many ways to get a person’s banking information, from obtaining their personal information to hacking their online banking, identity theft and fraud have become a concern for every banking customer. Because of this, banks are required by federal standards to have complex transaction monitoring systems. These systems, however, are extremely sensitive to anything that may be slightly unusual for fear of facing major fines. As usual, an over sensitive system will generate false positives. However, it can’t be determined that they’re false until they’re properly investigated by a bank employee. With employees investigating each and every alert that pops up, banks have needed to hire a significant number of additional people.
This is where AI and machine learning come in. By simulating real transactions and regulations that occur, an AI system will be able to sort through thousands, if not millions of potential transactions, identifying patterns and algorithms that a bank employee would never be able to catch. It would also allow learning systems to be implemented, which can then sort through real world transactions and investigate them in real-time. This would not only limit a bank’s overhead but also give customers peace of mind as they will not be alerted to false positives.
The Customer Experience
An additional benefit of integrating AI into a banking experience is it can improve the overall customer experience too. In a recent report by BankingTech, it was found that personalization, especially for millennials, has become extremely important. These customers “increasingly prefer digital servicing channels over going into a branch or calling in and have experienced AI in other areas of their lives – for example, Siri on iPhones.” If AI can make financial transactions easier to both execute and understand, modern customers would absolutely be interested in banks implementing this advanced technology.
One bank, Barclays, is already looking into these capabilities. Using Amazon’s Echo as his example, Barclay’s Chief Design and Digital Officer stated that people soon wouldn’t even need to be using a physical device to perform transactions. With the help of AI personal assistants like Echo, Cortana, and Siri, performing complex transactions or getting financial advice based on your financial portfolio may eventually be able to be done from the comfort of a customer’s home.
Have a look how Amazon Echo supports Capital One banking with voice.
For more on how AI and machine learning can impact not only the banking industry but your specific industry as well, please contact Ciklum!