Page 38 - Banking Finance September 2021

ARTICLE

headcount, error rate, time-frames and increasing through- techniques. Banks can use the prevailing technologies to
put in number of clients being on-boarded e.g. start with to support some major Indian languages, however
1. Automating basic rules for determining client in order to efficiently reach out to extensive population in
classification type using Artificial Intelligence for India; much more advancement is needed on NLP front.
regulatory norms such as KYC, FATCA,etc.
Data access and information privacy is a central aspect of
2. Contributing in credit and legal steps like preparing a
any AI work banks do. These aspects will be of paramount
credit report and drafting legal documents.
importance with introduction of regulations in Europe like
3. Account-setup/modification process involves client data
GDPR (GeneralData Protection Regulation). GDPR
being entered in a number of systems. This can be done regulation is currently applicable to European citizens;
by a software robot equipped with Artificial Intelligence.
however India and other countries have their own data
privacy regulations. Banks in India will have to build AI
Business Benefits for Banks in deploying AI systems with GDPR and similar privacy regulations in mind.
software -
Y Direct headcount reduction through automating
manual processes
Y Error free business operations
Y Higher process efficiency& speed

Y Initial capital expenditure but reduced expenditure over
a period of time

While Artificial Intelligence has several benefits, there are also
a few disadvantages. These softwares may operate in the
background or even deep background like internet spiders.
This implies that there must be ways to closely monitor these
activities that are as transparent as possible. No network is
invulnerable, and security may be a major concern for each
financial institution. A wide implementation of a high-end Experts have also stressed the necessity for more skilled
technology like AI in India is going to be with a lot of engineers to drive the segment. The biggest challenge is the
challenges. From the dearth of a credible and quality data to dearth of trained human resources; the existing workforce is
India's diverse language set, experts believe a variety of not familiar with latest tools and applications. Secondly, the
challenges exist for the Indian banking sector using AI. AI technology is an immense threat to redundant workforces
in the banking sector. The mass implementation of AI may
One of the key challenges is the availability of the accurate cause a crucialun employment problem in the sector.
data. Data is the essence of Artificial Intelligence, and any
susceptibility arising from unverified information is a serious One of the significant challenges that is faced by Industry
concern for businesses. Imagine for instance, the risks that and not just banks in India is unavailability of people with
could arise from KYC compliance AI systems if the data right data science skills. With only insignificant number of
sources are incorrect. Or contemplate the efficacy of a fraud good data scientists available to do AI work, the industry
detection AI system without the right kind of data. needs to work with universities in India to develop skilled
Organized mechanisms for gathering, validating, data scientists as well as develop internal training programs
standardizing, correlating, archiving and distributing AI to train workforces on data science skills. Also, identification
relevant data is vital. of right use cases for AI implementation with the help of
domain experts and data scientists can help banks in
India has 150+ languages with sizable spoken population. successful execution of AI technologies for banking functions.
Applications that use speech to text or text to speech rely
on natural language processing (NLP) libraries and Whenever the discussion around AI is brought up, there are

38 | 2021 | SEPTEMBER | BANKING FINANCE