4 Artificial Intelligence Trends That Are Going Change The Banking Scene From 2022 Onward
AI is proving its prominence in this major field
Traditional banks in the ever-improving era of new data-driven technologies such as AI/ML, cloud, or DevOps are struggling to handle the burden of outdated systems. New players in the field have been emerging successfully and setting the trends for the whole industry. It is either you keep up or get left behind in this game.
So what are some essential tech trends in the upcoming years that banks should know about to thrive in a digital society?
1. Generative AI
Described as “one of the most promising advances in the world of AI in the past decade” by MIT Technology Review, Generative AI is the technology that uses existing text, audio files, or images to generate new content and enables computers to learn the underlying pattern related to the input, and then use that to generate similar content. It also learns a digital representation of artifacts from data and creates innovative new creations that are similar to but not identical to the original.
There are various techniques to do that such as generative adversarial networks (GANS), transformers, and variational autoencoders.
Most scenarios in banking and investment services involve the use of generative adversarial networks and natural language generation for fraud detection, synthetic data generation, and risk factor modeling. With Gartner’s prediction that 20% of all test data for direct consumer interaction will be synthetically generated by 2025, Generative AI is helping transform the banking industry.
2. Privacy-Enhancing Computation (PEC)
While PEC has been around for decades, it only started getting attention very recently.
Gartner defines PEC as ‘people-centric’ and it features three technologies that protect data including:
- A trusted environment where sensitive data can be processed or analyzed.
- Performs processing and analytics in a decentralized manner.
- Encrypts data and algorithms before analytics or processing.
With this trend, organizations are empowered to conduct research securely across regions and with competitors without betraying their confidentiality.
Within the banking field, the adoption of PEC is on the rise in use cases like fraud analysis, intelligence operations, data sharing, and anti-money laundering.
3. Responsible AI
Consumers all over the world are demanding transparency, reliability, bias elimination, diversity, and inclusion from every industry and business. The financial sector is not and should not exclude itself from this, especially when this industry is among the major fields that are increasingly using AI to improve business outcomes, while also dealing with strict regulation and increased public scrutiny.
Many previously manual banking functions are now partially or completely automated by AI. AI detects fraud, making the entire financial system more secure and reliable. It also plays a role in some banks’ credit scoring systems and weighs in on loan application outcomes. However, issues such as explainability, data quality, and algorithmic bias must be addressed.
Moving forward, businesses must create and manage AI systems in a fair, open, and considerate manner while also thinking about society as a whole. Measuring and tracking improvements, starting small, and selecting simple models are some of the best approaches for operationalizing Responsible AI principles. This is what Microsoft and TD Canada Trust are setting out to achieve in the upcoming years.
4. AI-powered voice and speech recognition
AI-powered voice and speech recognition software and solutions are witnessing increased adoption by leading banks and financial institutions worldwide.
According to a Cognizant study, 72% of respondents stated voice is crucial to the bank’s future success, and 94% of participants said the transition toward speech will increase in the future.
The first bank to include voice recognition functionality in its customer-facing products was HSBC in February 2019. Since then, biometric authentication in the financial industry has taken a new turn. Customers are no longer required to remember their passwords.
International banks are currently researching voice technology to improve client security measures. For instance, banks can enhance the consumer experience when using their financial services by using interactive voice response technology. VAI technology vendors are in high demand as they are needed for banks to establish speech and voice recognition.
Voice-driven technology will help banks provide top-notch customer service, ensure quick and effective customer support, cut service costs, and utilize branch staff for other tasks.
To advance in the digital era, banks must adopt these four technological trends. Your fundamental systems must be rebuilt, AI-driven technologies and processes must be implemented, and a modern, zero-trust cybersecurity architecture must be put in place for banks to get ahead of their competitors.