Page 32 - Banking Finance November 2019

ARTICLE

industries to adopt the AI for various applications. Banking
sector is becoming one of the first adopters of AI. And just
like other segments, banks are exploring and implementing
the technology in various ways.

The rudimentary applications AI include bring smarter chat-
bots for customer service, personalizing services for
individuals, and even placing an AI robot for self-service at
banks. Beyond these basic applications, banks can
implement the technology for bringing in more efficiency to
their back-office and even reduce fraud and security risks.

Unsurprisingly, research firms are bullish on the potential of
AI in banking. According to Fintech India, the global spending
in AI applications touched $5.1 billion, up from $4 billion in are already investing in such technologies, and close to 70%
2015. There is a keen interest in the Indian banking sector are planning to in the near future.
as well.

AI is not just Customer Service in Banks
Advent of AI banking in India
State Bank of India, the largest bank in India, last year
According to recent report, 83% of Indian bankers believe conducted "Code for Bank" hackath on to encourage
that AI will work alongside humans in the next two years - developers to build solutions leveraging futuristic
a higher than the global average of 79%. "93% bankers in technologies such as AI and Blockchain into the banking
India said they increasingly use data to drive critical and sector. SBI has developed chatbot based on AI ,SIA (Strategic
automated decision-making. More partner-supplied Intelligent Assistant ) to give the information to 850 million
customer data means a higher degree of responsibility for
queries on various topics and products viz., Savings Bank,
banks. Yet, 77% Indian bankers agree that most firms are
Pre approved personal loans,Credit cards, Insurance etc.
not prepared to confront impending waves of corrupted
Private banks like HDFC Bank and ICICI Bank have already
insights from falsified data," said the report.
introduced chat-bots for customer service. Some have even
gone ahead with placing robots for customer service. Last
AI is not new to India. Research institutions and universities year, Canara Bank installed Mirta and Candirobots at some
have been working with various AI technologies for decades, of its offices.
and especially in the area of social transformation. With
enabling technologies becoming a lot more accessible and Payment companies are using AI to offer personalized
inexpensive, AI is now becoming mainstream, with large payment experience to consumers. By applying AI and
enterprises and start-ups looking at different opportunities.
analyzing past payment patterns, payment systems can
Our research shows that the adoption of AI has the potential
prompt the preferred payment instrument which best suits
to add nearly $1 trillion to the Indian economy in 2035. AI a purchase at the time of checkout. Say a consumer avails
adoption is still in its nascent stages, and a lot more needs EMI option frequently for his big-ticket purchases, then the
to be done to realize its full potential.
best EMI option is made available to the consumer at the
time of checkout. Such personalized consumer experiences
Application of AI and ML (machine learning) to different drive up consumer spending and creates stickiness to the
functions within the banking industry has enabled them to product consumers are using.
offer a far more personalized and efficient customer service.
By achieving that, banks have also been able to gain better
insights into their customers' preference and expectations Common uses of AI in Banking in Future
from the bank. Accordingly, automation of back-end Compliance, Fraud Detection and Anti-money-laundering:
workflows has shown better outcomes. According to various Anomaly detection can be used to increase the accuracy of
industry reports, more than 36% of large financial institutions credit card fraud detection and anti-money laundering.

32 | 2019 | NOVEMBER | BANKING FINANCE