How Artificial Intelligence Is Helping Banks Become More Human Centric in 2023

How Artificial Intelligence Is Helping Banks Become More Human Centric in 2023

Natural language based artificial intelligence (AI) is making extensive strides across front, middle and back offices in the banking, financial services and insurance sector (BFSI), and has helped IT and business executives improve efficiency, detect risks and identify revenue opportunities. In this blog, we talk about how AI is helping bank executives create a more human centric bank and drive sustainable growth agendas in the BFSI sector today.   

"86% of IT and business executives interviewed say that AI will be very or critically important to their business’s success in the next two years." - Deloitte  

AI in front office for customer engagement 

When it comes to AI applications in front office operations, chatbots have been in play for more than 10 years. But have they evolved? With the rising intrigue and emphasis on natural language technologies like GPT3, AI chatbots are evolving in their service to provide better support to customers. Beyond merely answering customers' questions, chatbots today can anticipate their needs and accelerate transactions. For instance, a customer could be trying to pay a bill online but is having trouble inputting the correct payment amount. The chatbot could sense this issue and help, such as by providing the customer with their recent payment history or by suggesting they contact the biller directly for more information. In another example, a customer could be trying to apply for a loan but is unsure about the requirements and process. The chatbot could anticipate this need for information and provide the customer with details about the loan application process, including any required documents and eligibility criteria. 

Other applications that are emerging include personalized recommendations; using your bank data to provide tailor made loans, credit cards and investment advice as well as conversational AI for voice bots to reduce call centers queues and wait times. Collectively, these applications not only help facilitate a smoother banking experience but help build trust among customers - ease of experience and trust are the 2 most important factors influencing customers' decision in choosing a bank, according to a study by Raconteur 

trust-banking-infographic

Source: Raconteur 

AI in the middle and back office for optimizing risk management and operational costs 

While the front office facilitates transactions for customers, the middle and back office of a bank plays the crucial part in risk management amongst other operations to fulfill these transactions. AI has been an integral part in the middle to back offices to abate rising operational and regulatory costs and ultimately improving speed to customer and service quality. Here are 3 ways:  

  • Risk Management Processes. AI can be used to automate or streamline existing risk management processes such as compliance, credit scoring and customer segmentation. This will reduce costs while improving accuracy and efficiency.  
  • Risk Identification. AI can be used to detect risks that traditional methods would miss, such as fraud or money laundering schemes, by analyzing large amounts of unstructured data such as emails and online chats. This helps banks identify emerging threats before they become a problem so they can take appropriate action before it’s too late.  
  • Data Collection & Analysis. Many financial institutions struggle with collecting and analyzing data from various internal sources such as software systems, e-commerce sites or even social media platforms like Twitter and Facebook. However, with machine learning techniques such as natural language processing (NLP), banks can process all this.  

The application of Artificial Intelligence certainly offers new opportunities for BFSI companies in terms of optimizing cost, reducing risks and enhancing customer engagement and acquisition but we are still in the early days. An Accenture research finds that more than 60% of companies are only experimenting with AI and BFSI in that study is considered low in terms of AI maturity against other industries. This offers a huge potential for the road ahead for bank executives building a more customer-centric focus in 2023 and beyond.   

MRMedianChart

Source: Accenture

At PALO IT, we help global BFSIs explore and adopt new technologies and business models in their journeys to pave more sustainable growth paths that’s built on seamless customer experiences and robust technologies. If you are keen to learn more about what we have accomplished with our clients like Trust bank and more, click on my email here. I'd love to get in touch.  

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