Use Cases of Artificial Intelligence(AI) in Banking: Market Stats and Benefits
Even with COVID-19’s negative economic effects, the banking industry is one of those that are growing. Even more than before, the banking industry is adjusting to the new realities of the world by implementing cutting-edge technologies, particularly the usage of Artificial Intelligence.
It’s no secret that AI is one of the most exciting (and controversial) technology trends happening in the 21st century.
Top AI Statistics (Editor’s Picks)
- As of 2022, the global AI market is valued at over $136 billion.
- AI industry value is projected to increase by over 13x over the next 8 years.
- The US AI market is forecast to reach $299.64 billion by 2026.
- The AI market is expanding at a CAGR of 38.1% between 2022 to 2030.
- By 2025, as many as 97 million people will work in the AI space.
- AI market size is expected to grow by at least 120% year-over-year.
- 83% of companies claim that AI is a top priority in their business plans.
- Netflix makes $1 billion annually from automated personalized recommendations.
Also Read- Top Trending Use Cases of Artificial Intelligence in the Finance Industry
AI has the potential to overcome many traditional banking difficulties. But how?
Let’s find out!
In this blog, we’ll discuss everything you need to know about AI in the banking industry. We’ll also discuss the benefits and use cases of AI in the banking industry!
So, without taking much of your time, let’s quickly start with,
Key market stats!
- According to research by McKinsey, AI technology may increase global banking’s value by up to $1 trillion a year. By tailoring services and reducing costs as a result of the improved efficiency of internal operations, custom AI solutions for banking & finance can also assist raise revenue.
2. One out of every three financial services workers, according to Forbes, expects AI will increase their company’s annual revenue by at least 20%.
As you’ve seen, the key market stats state the potential of AI app development services for the banking & finance industry.
Now, let’s move forward and discuss the main component of this blog, which is,
Top Benefits of AI in the Banking Industry!
Key benefits of using custom AI solutions for the banking industry are:-
#1. Lesser workload
By being accessible 24/7, AI-enabled assistants and chatbots can lessen the manual workload for banks and their workers. Customers can use chatbots to help them with fundamental banking tasks, including opening or closing accounts, transferring money, and opening investments, among other things.
#2. Strengthen data security
Using smart AI solutions in the banking & finance industry reduces fraud while enhancing accuracy and security and spotting potential fraudulent activities before they take place. For remote operations specifically, banks can leverage AI and ML to verify the identities of their customers and improve the accuracy of the identification process. The banking industry must rely on technology as online activities grow in number to ensure data accuracy and lower the danger of fraud.
#3. Better customer experience
Banks and financial services businesses will be able to comprehend their consumers better by leveraging big data and AI. This enables them to change from a customer-centric approach to one that is product-centric, improving their offering with tailored services. Offering on-demand, automated assistance, chatbots and virtual assistants powered by AI can also enhance the customer experience. Also, applications for loans, which once required weeks to process, may now be completed in a matter of days. AI is capable of conducting a fair analysis based on a variety of credit factors.
#4. Risk management
Through precise reporting, these technologies lower risks for both clients and banks. After extending credit to customers, predictions can be generated using transaction history. Employees at banks have more knowledge about credit risk analysis. Early error identification and the knowledge of potential future risks aid in the banking sector’s ability to plan forward.
#5. Improves operational efficiency
By processing large amounts of data and enhancing the precision and speed of mathematical calculations, AI algorithms can assist banks in streamlining their operations. By examining historical data, for instance, banks can quickly identify the best trades to reduce the initial margin. They can indeed then use the knowledge gained to test models for assessing risk models and improve capital optimization.
As you’ve seen the benefits of AI in the banking industry, now let’s check,
Also Read- How to Create an AI-based Chatbot App like Replika?
Top use cases of AI in Banking
Top use cases of AI in banking are:
#1. Robi advisor
Robo-advisors are not only less expensive alternatives to conventional financial advisors, but they may also help a vast number of consumers receive financial counseling and make better financial decisions. Additionally, data-driven AI-powered Robo-advisors can offer investors advice on estate planning, retirement, and other topics, which can make the account opening process more engaging.
#2. Evaluating credit report
In order to assess the client’s complete financial position, AI is being used to review investment, cash, and credit accounts. Since AI generates tailored advice based on any new incoming client data, it aids banks in keeping up with real-time changes.
Banking institutions can now process a lot more client information than in the past. To ascertain whether the customer is eligible for the goods or services they are asking for, this data is reviewed and evaluated.
#3. AI Chatbots
Chatbots and digital personal assistants have altered how customer service and communication are provided. In order to provide clients with a highly tailored experience, chatbots have been developed. The use of AI in the banking industry has the potential to transform how customers access banking products and services entirely.
As AI improves, chatbots in the banking industry are becoming more accurate and practical. AI software applications known as chatbots communicate with users via text and speech. With the use of machine learning, deep learning, and natural language processing, chatbots’ operational capabilities are improved. With AI integration at its foundation, chatbots can leverage contextual awareness to offer recommendations that are appropriate and provide knowledgeable responses to client inquiries.
#4. AI-based mobile banking apps
Artificial intelligence technology is primarily being used by banks to improve and tailor the customers ’ experience.
Mobile banking is frequently used by generation z. This indicates that banking apps powered by AI can provide contextual, tailored, and predictive services to match customer expectations among young people. AI-based mobile banking applications may monitor user activity and provide individualized advice and insights on payments and financial matters.
#5. Fraud prevention
Fraud has consistently been an issue in the banking industry. However, credit card issuers are incorporating predictive analytics into their anti-fraud workflows using artificial intelligence, drastically lowering false-positive results.
Analytics solutions powered by AI gather and analyze data by seeing and learning from user behavior patterns. This is then conducted to identify rarity and any indicators of fraud attempts and incidents.
#6. Quantitative trading
Using big data sets to identify patterns that can be used to make strategic trades is known as quantitative trading. Banking institutions can evaluate any number of complicated data sets more quickly and effectively with the use of AI-powered solutions. By automating the deals, this algorithmic trading method can assist the service provider to save precious time and resources.
Also Read- How AI-driven CRM Systems Help Businesses Increase Sale?
Conclusion
The potential of AI in the Banking industry is still evolving as we move into a fully new digital era. Artificial intelligence-based innovations have given the banking sector tremendous leverage. As a result, banks and other financial institutions are increasingly providing customers with superior financial services.
In order to create portals, mobile apps, and web applications leveraging AI for the banking industry and many other sectors, get in touch with a top AI development company.
