AI in Banking – How Artificial Intelligence used in Banks

  Lakshmi S. N
II Sem MCA, NCMS

AI in banking apps and services has made the sector more customer-centric and technologically relevant. AI-based systems are now helping banks reduce costs by increasing productivity and making decisions based on information unfathomable to a human.In the banking sector, AI has provided amazing analytical technologies that simply improve the whole ecosystem of payment for the banks and the end consumers.Artificial Intelligence and Machine Learning play a vital role in the banking industry by providing security features as well as convenience to its customers.  AI technologies are revolutionizing traditional practices, streamlining operations, enhancing customer experiences, and mitigating risks.

The top AI trends in banking are :

The impact of AI in banking is immense, which has made different banking and financial companies keep themselves updated with the recent trends:

• In banking, AI-powered chatbots and virtual assistants are being used to improve customer service, offer individualized support, and effectively handle common inquiries.
• Robotic Process Automation(RPA) automates routine manual operations, like data input and document processing, boosting operational effectiveness and lowering banking procedure errors.
• By analysing massive volumes of data, finding trends, and detecting fraudulent activities in real time, AI is increasingly utilized to identify and prevent fraud.

How does AI help in banking

AI for corporate banking automates tasks, boosts customer services through chatbots, detects fraud, optimizes investment, and predicts market trends. This increases productivity, lowers costs, and provides more individualized services.

 How AI helps in banking risk management?

Here are some ways in which AI in banking risk management helps prevent cyber attacks. 

Data analysis: AI systems analyse vast amounts of data to spot trends and abnormalities that could be signs of danger.

Real-time monitoring: AI in digital banking keeps track of account activity and transaction data in real-time to quickly identify and address risks

Credit Decision: When financial services were reluctant to employ these technologies in their operations, add to the business models, even banks got ready to incorporate AI and ML in their functioning. Now, artificial intelligence is widely used in the development of banking apps. Fast and correct assessment of borrowers at lower costs.

Automated routine processes.

Dip in the costs to solve standard tasks.

Efficient and effective processing of huge amounts of data.

Improved client support system.

Fraud Detection and Security:In the fraud detection and security. AI algorithms analyse vast datasets in real-time to identify unusual patterns and anomalies, helping to detect fraudulent activities promptly. 

Mobile Banking :By using Artificial Intelligence in daily life, banks have gone entirely digital. Opening a bank account has never been easier, thanks to the paperless process. They now provide personalized mobile banking experiences to their customers with special offers on their services.

The integration of Artificial Intelligence into banking and finance is transforming the industry, enhancing efficiency, improving customer experiences, and enabling more informed decision-making. As financial institutions continue to adopt and adapt to AI technologies, the sector is poised for further innovation. However, with these advancements come challenges, such as ensuring data security, addressing ethical considerations, and navigating regulatory landscapes. The ongoing collaboration between technology experts, regulators, and financial institutions is essential to harness the full potential of AI while maintaining the integrity and trust that are fundamental to the banking and finance sector.