Page 31 - Banking Finance October 2020

ARTICLE

customers’ vital information over a virtual network that is analyzing factors like previous account activity and
quite vulnerable to online frauds and cyber-attacks. interactions to make better product selection offered by
Exploiting such vulnerabilities impacts the trust and banking & financial service companies.
relationship that the bank shares with customers.
The ability of ML technology to access data and grasp
Owing to the unique advantages, more recently, the fintech consumer behaviour pattern helps to automate customer
and banking industry in India have increasingly implemented support system that can imitate a human agent developing
AI technologies. The imperative for the implementation is the ability to understand and respond to uncommon
because it enhances the efficiency of the business concerns further reducing cost. Significantly, automated
management operations in front-end and back end support systems can direct customers to the appropriate
processes. Currently, the AI ecosystem depends on natural department, providing the option to resolve issues by using
language processing and natural language generation an automated interface without the need for human
technologies enabling various Chatbot initiatives by various interaction.
banks and financial institutions. The mentioned technologies
coupled with AI enables optimum financial decision making Adoption of AI in Banking and Finance
vis-à-vis issues regarding transactions, detection of fraud,
credit-scoring and risk and wealth management. in India
Primarily, the adoption of AI in the banking and financial
With AI, the power of advanced data analytics is used to sector can be attributed to the larger digital proliferation
fight deceptive transactions and improve compliance. It occurring within the sector. The application and use of AI-
takes a few seconds for the AI-based algorithms to complete enabled processes in consumer banking are wide-ranging
anti-money laundering activities. Moreover, AI supports the and across different stages of operations. The critical usage
banks in managing huge volumes of customer data and of AI in the banking industry is presented below:
develops valuable insights. AI features such as Bots, Digital
Payment Advisers and Biometric Fraud Detection enhances Business and Management Financial Operations
online security and customer loyalty. Operations
Customer Interface Credit Scoring and
The Prospect of AI & ML in Finance and Loan Decisions

Banking in India Customer Insights and Fraud Detection and
Personalization Risk Management
The appropriate use of AI and ML technologies can enable
Business and Strategy Insights Wealth Management
outstanding results and significant improvement is realized
in terms of replacing legacy systems and achieving a Facilitating Backend Processes Enabling Secure
developed enterprise. Globally, the integration ofAI & ML Transactions
has helped the banking sector in decision making, improving
customer experience, increasing the backend and frontend (Source: AI in Banking & Finance. The Centre for Internet &
staff efficiency. Society)

Below par customer service is one of the chief complaints Integrating AI & ML for Robo-Banking
among consumers and impacts negatively on customer With an objective on improving efficiency, firms across the
engagement that leads to customer defection and retaining banking industry are aggressively investing in automating
irate customers is cumbersome and comes at a cost. back-end operations by digitizing critical processes and
Although due to slow customer service several industries enhancing productivity by using Robotic Process Automation
adopted to the universal utilization of automated phone (RPA). The technology has been gaining wide-scale
support, customers often get frustrated for not being able acceptance owing to the high level of efficiency that the
to speak to a human. Here, machine learning helps in technology achieves and hence has enabled large scale
comprehending the individual need of each customer by deployment by the competitive players of the banking

BANKING FINANCE | OCTOBER | 2020 | 31