To compete and thrive in this challenging environment, traditional banks will need to build a new value proposition based on AI capabilities and cutting-edge analytics.
While Artificial Intelligence (AI) has been around for decades, it has become even more prevalent in recent years. No industry or sector has remained untouched by its impact and prevalence.
The evolution of technology and consumer changes have marked a pivotal and driving moment for new business models, and the finance industry is among those looking for multiple ways to leverage the power of this revolutionary innovation.
Banks that chose to maintain the traditional model face several competitive threats, such as neobanks and non-banking competitors. Leading financial institutions are already applying AI to services such as split-second loans, biometric authentication and virtual assistants.
Fintechs and other digital commerce innovators are de-intermediating banks from crucial aspects of customer relationships, and big tech companies are incorporating payments and, in some cases, lending capabilities to attract more users with an ever-widening range. services.
In addition, as customers transact daily through digital channels, they are getting used to the ease, speed and personalized service offered, leading to increased bank-related expectations.
To compete and thrive in this challenging environment, traditional banks will need to build a new value proposition based on AI capabilities and cutting-edge analytics, becoming “AI first” in their strategy and operations.
What is Artificial Intelligence and how can it benefit the financial area?
Artificial intelligence is a broad branch of computer science concerned with building intelligent machines capable of performing tasks that normally require human intelligence. Some examples: Siri, Alexa and other smart assistants, self-driving cars, chat bots, Netflix recommendations, and more.
The decision of financial institutions to adopt AI will be accelerated by technological advancement, greater user acceptance and changes in regulatory frameworks. Banks using AI can streamline processes, automate tasks, improve customer experience, reduce fraud risk, provide 24/7 access to their accounts and services.
Top AI trends for the finance industry
# Trend #1: Better financial decision making for consumers
One of the most promising applications of AI in finance is the use of predictive analytics to make personalized financial decisions. This technology can be used by consumers who want to save money and build a solid financial future.
Forecasts could be, for example: “Based on your spending habits and desired savings level, we recommend that you change your spending category from: 'Eating out' to 'Ordering delivery'.
Such analyzes of consumer behavior will become increasingly common as new methods are developed and digital data becomes more readily available for analysis.
# Trend #2: Deliver better customer experience
AI can help improve this essential business point by using chatbots, digital assistants that communicate with customers through text messages or voice commands, and can answer common questions about products and services.
AI is likely to take off in an area where many consumers express frustration. With chatbots, there is no need to navigate through menus or wait for an available representative – the bot will provide service for you right away.
# Trend #3: Real-time financial data
This technology will improve the current fraud management approach. As AI tools become more powerful, they will be able to detect money laundering or suspicious activity in real time.
Another benefit is that this technology can help banks identify errors before they become major problems.
Trend #4: Robotic automation in processes
Fintechs will also continue to implement robotic process automation in their operations. This is a system of software bots that can complete repetitive tasks faster and more accurately than humans. These virtual workers read a set of scripts or perform tasks on a certain type of transaction and then transfer the information to human employees for review and approval. The result is an improved workflow.
# Trend #5: Security and Authentication
Finally, AI will help simplify security protocols when it comes to authentication. Today's multi-factor authentication process may seem slow and cumbersome to customers, but technology can help by providing more accurate information about who you are within milliseconds of scanning your fingerprint or iris.
Artificial intelligence (AI) is revolutionizing the way consumers and businesses access and manage their finances.
To thrive in a digital age marked by innovation, the financial sector will need to continue to invest in potential resources and analytics that deliver intelligent, personalized solutions and experiences at scale and in real time.
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