AI for Banking: Examples, Use Cases & How AI in Changing Banking? 2024

Use cases and applications of AI in banking and finance

Artificial Intelligence (AI) is making significant strides, not just in the realm of national defense. Over the past decade, military operations have seen remarkable improvements, from precision-guided missiles to advanced bomb disposal systems. It’s clear that nations worldwide are taking note and investing in AI capabilities for their armed forces. Automated grading systems aren’t just a time-saver; they’re a step toward more objective and consistent grading, which benefits both teachers and students. It’s a win-win situation for a more efficient and equitable educational experience.

For example, a banker considering a loan to a small business might use AI to access data on the business’s financial history, industry, and local economy. AI could then analyze this training data to identify the risk of loan default and recommend a course of action. By harnessing the power of artificial intelligence (AI), banks can gain a deeper understanding of their customer base and use this knowledge to make better decisions about products, services, and marketing. AI is now a common tool in activities such as internet searches, face recognition, social network recommendations or route determination in navigation applications. Historically, the banking system has always sought to maximize its profits, so it is inevitable that it will tap into the AI world with great force.

Top Use Cases Of Artificial Intelligence In Banking and Finance

This makes it far easier for banks to minimize risks and protect customers’ assets. Needless to say, artificial intelligence can remarkably influence the banking space – reduce operating costs, automate processes, and improve the overall customer’s banking experience. With the increasing conversational AI use cases in banking, the service quality has improved dramatically. The use of generative AI-generated synthetic data provides a controlled environment for compliance testing, allowing financial institutions to evaluate their systems, processes, and controls.

KAI helps banks reduce call center volume by providing customers with self-service options and solutions. Additionally, the AI-powered chatbots also give users calculated recommendations and help with other daily financial decisions. DataRobot provides machine learning software for data scientists, business analysts, software engineers, executives and IT professionals. Alternative lending firms use DataRobot’s software to make more accurate underwriting decisions by predicting which customers have a higher likelihood of default. Machine learning solutions are already rooted in the finance and banking industry.

The Power of Generative AI in Banking and Financial Services in 2024

Real-time capabilities are at the forefront of our AI applications, facilitating data-driven decisions on the go. In an increasingly mobile-centric world, our mobile optimization ensures that AI solutions are not only accessible but also user-friendly on smartphones and tablets. It empowers banks with a deep understanding of potential risks, enabling informed decision-making and proactive risk mitigation. The future holds the promise of even more sophisticated risk assessment, ensuring resilience in a rapidly changing financial landscape. For instance, your bank could collaborate with fintech startups to provide AI-based financial planning tools, extending your services to help customers manage their investments and financial goals more effectively. According to McKinsey’s estimations, the adoption of AI technologies in the global banking sector has the potential to add an extra $1 trillion in value each year.

One of AI’s most common use cases includes general-purpose semantic and natural language applications and broadly applied predictive analytics. Banking is a heavily regulated economy sector worldwide, as governments seek to prevent financial crimes and large-scale defaults. This means banks must have acceptable risk profiles and comply with ever-changing compliance regulations. Nonetheless, AI can significantly help in portfolio management, risk analysis, and providing investment advice to customers. Between growing consumer demand for digital offerings, and the threat of tech-savvy startups, FIs are rapidly adopting digital services—by 2021, global banks’ IT budgets will surge to $297 billion.

A chatbot can understand user intent in natural language to assess the issue and give relevant product suggestions. For example, it can assess data given by a user looking for a home loan to provide them with ideal loan plans that match their requirements. Conversational AI in banking can help you understand and resolve customer queries by automating repetitive processes that typically take a bank employee much longer. Better efficiency and faster solutions improve your credibility too – which is vital in the banking space. RBC Capital Markets is expanding its AI-based electronic trading platform to Europe, demonstrating the growing global adoption of generative AI in finance and banking.

Today, with the use of custom AI solutions, banks can significantly optimize front-office functions like credit scoring and insurance based on AI algorithms’ critical data. With AI-powered credit scoring tools, the banks can speed up their lending processes and simultaneously reduce the lending process’s risks. According to a report by the World Bank, AI-powered financial inclusion solutions will help banks and other financial institutions to reach 1 billion new customers by 2025. The report also found that AI-powered financial inclusion solutions can help banks to reduce the cost of providing financial services to low-income customers by up to 50%. Our experts can assist you in utilizing AI to generate transformational changes because of their knowledge of artificial intelligence and awareness of the particular problems encountered by the banking industry.

One of the most important benefits is that it can help to improve customer service. For example, if a customer has a question about their account, they can ask the artificial intelligence system for help. The system will be able to provide answers to common questions, and it can also help direct customers to the right person if they need more help. Our experience includes solutions for risk management, compliance, AML, fraud checks, customer support.

Sales teams can use this data to upsell customers with the products that most likely pique their interest. Artificial Intelligence (AI) is a trendy concept in this digital business world. AI, Machine Learning, Natural Language Processing (NLP), Speech Recognition, and Predictive Analytics have become significant assets for creating innovative and smart digital applications. Autonomous vehicles, self-driving cars, virtual assistants, and smart voice-recognizing applications are all a few innovations in AI technology. Yet, challenges remain in rolling up generative AI at scale, particularly in a tightly-regulated industry. We’ve helped companies like Plai integrate generative AI into existing solutions.

Read more about Top 7 Use Cases of AI For Banks here.

Categorised in: Hightech News

This post was written by James Habib