We live in a time when Artificial Intelligence, or as we usually call it in short, AI, is no more a distant reality. It is everywhere, touching our lives in ways that are beyond our comprehension.
From the customized ads we received in between Facebook posts based on what we are looking for, to the chat bots that guide us along a process on a new website, there’s ARTIFICIAL INTELLIGENCE everywhere. This is a highly developed technology that helps to machines to simulate human intelligence, to overcome scalability for cognitive computation.
This requires the use of algorithms that can be used for NLP, i.e. Natural Language processing, as well as ML i.e. Machine Learning.
The new and improved ARTIFICIAL INTELLIGENCE is being used in all fields, including the banking and financial scenario, and this use will grow further in the next five years.
A Look at Artificial Intelligence in Banking
If there’s one sector that has seen huge changes as a result of Artificial Intelligence, it is the banking and financial services sector.
Digital labor is one of the fast-developing technologies in the world, and it’s taking over the banking industry. This includes Robotic Process Automation, as well as Intelligent Process Automation. There have been surprising advancements, though it is yet to be seen how well they perform once they are used to find the solutions of existing problems.
2017 has seen the implementation of practical thinking machines in the financial industry. This includes surveillance devices to prevent crimes, as well as computation tools for planning taxes. Clients receive automated advices on investments by wealth managers through various platforms. The underwriting tools from insurers are also automated to help with the everyday decisions.
Their primary entry was in the areas of finance and operations. Now, Robotic Process Automation is now eyeing Human Resource, Risk, and Compliance, too.
Surveys in 2017 revealed that around 30% of the who responded were interested to adopt it in their enterprise. However, the journey was pretty difficult, as organizations came face to face with issues they had not known of previously, in areas of control, people and risk.
The companies associated with ARTIFICIAL INTELLIGENCE have received quite a lot of funding in the year 2017, which is obviously for a good reason. Surveys further revealed the interest of 52% of the industry to invest in ARTIFICIAL INTELLIGENCE, and substantially so.
Another 66% is likely to invest in Artificial Intelligence in the next three years. Around three-quarters of the industry is under the belief that ARTIFICIAL INTELLIGENCE will help with the advancement of business in future.
What to Expect from Artificial Intelligence in Banking Sector
One of the major expectations regarding the implementation of Artificial Intelligence in banks is the shift to Intelligent Process Automation from Robotic Process Automation.
The bots that are currently in use depend on humans in order to be trained to perform their work. However, in 2018, this is likely to change, as the applications of the advanced technologies of Artificial Intelligence will emerge in the year.
Obviously, these tools will need training, but the previous patterns of data, as well as past decisions, will come into play here. Several clients of Artificial Intelligence are trying to explore Intelligent Process Automation, with the production of bots on the line.
Obviously, the big question is what to expect from Artificial Intelligence after this. It is to be remembered that the term itself is applied to many processes, whether it is a complex thinking task, or the automation of a simple assignment. In the upcoming year, firms in the financial sector will proceed to Augmented Intelligence, which is much more progressive, as there will be the use of tools which can be used by humans in the process of decision-making, as well as getting lessons from relevant interactions.
Artificial Intelligence will also come in handy in the customization of the design of products by the firms, as well as forming analytics for predictions to that the results are improved to bring about a reduction on the accident rates.
Small Banks and Artificial Intelligence
Even the small banks, which are trying to get ahead in the fierce competition with large and medium banks, will reap the benefits of the application of Artificial Intelligence.
It is clear that the smaller banks are also looking for a differentiator here. The bigger banks use advanced quality technologies, and have their own teams of analysts and scientists who are well-versed in the area of handling data, and they take care of different areas, from anti-laundering system to credit approval, from risk to finance, from KYC to portfolio.
Small banks will use Artificial Intelligence to gain efficient operations, improved interactions with customers, detection of fraudulence, better recommendations, etc.
As Artificial Intelligence will have a firmer grip in the banking sector in the year 2018, there will be some obvious questions and challenges that the financial firms will have to face. They will have to work out the solutions to the problems regarding how to govern machines.
It might also be tricky to decide upon the amount of authority to be given to Artificial Intelligence. Another important question to ponder upon is how to ensure that machines will keep up to their fiduciary duty.
Regulations are another area of importance that demands the attention of the banking enterprises that are going into Artificial Intelligence, and so is the selection of controls that will have to be applied in order to make sure that decisions and actions happen within fractions of a second. These are obvious questions, of course, which the industry must face, to reap the benefits of Artificial Intelligence, which is here to stay.