Page 12 - Risk Management Bulletin April -June 2021

RMAI BULLETIN APRIL TO JUNE 2021

Importance of Artificial Intelligence in Cognitive Process Automation:
Banking Sector: This mechanism ensures complete automation of a
range of information-based, costly and risk-prone
In present era the role of banks are very important for
the development of financial life cycle for modern banking services. This helps in securing rate of interest,
society as it handles cash, credits and various financial reduces costs and ensures precise and fast processing
of services at each stage. It is a process that takes care
transactions. In other words we can say the banks are
of learning and improvising on previous experiences
now financial supermarket like other shopping centers
automatically and adopts an advanced approach
of essential items. In past the handling of financial
transactions was not that easy because entire process without human intervention for its performance
was dependent upon the human efforts only, a lot of through constant machine learning.
paper work and a chain of human being was required
to manage the regular transactions with accuracy. Customer Satisfaction:
Customer satisfaction is the first and foremost
To improve the traditional phenomena banks primarily important factor of any bank. The banks provide
used computers where they had a detailed record in personalized and most efficient services to each and
their databases. In the chain of that various channels every individual customer. AI helps in increasing
were added like ATMs, Mails, Internet Banking, mobile revenue, faster decision making and having a good
Banking etc, that made a revolution in banking sector customer relationship. Having AI not only ensures that
and provided a structured path to move on. This smooth the customers are happy but it also helps the banks
operation of the banking world that is done through to maintain and have well organized back offices.
computers and network is possible only because of the Based on past interactions, AI develops a better
Artificial Intelligence. AI technologies are making understanding of customers and their behavior. This
banking processes faster, money transfers safer and enables banks to customize financial products and
back-end operations more effective and efficient. services by adding personalized features and intuitive
interactions to deliver meaningful customer
Banks are deploying various artificial intelligence engagement and build strong relationships with its
techniques to enhance the customer delight by customers.
enabling frictionless, 24 x 7 customer interaction. AI
in banking applications is not just limited to retail Detection of Frauds & Prevention:
banking services, and it also extends its benefits to the Fraudulent activities are one of the most fearful
back and middle offices of investment banking and all concerns amongst the people and banking industry.
other financial services. There are numerous aspects Especially when a financial fraud occurs, the effected
of AI illustrated below that will enlighten on its individual finds it very difficult to cope and recover
importance in modern banking system. from such losses. Whenever any fraudulent activity
noticed by bank and if it is immediately brought to the
Effective Decision-Making: attention of the bank, then the bank authorities takes
prompt and necessary action to handle the incident in
Cognitive systems that think and respond like human a very organized manner, and this is because of the
experts, and provide optimal solutions based on
artificial intelligence. This quick response has helped
available data in real-time. These systems keep a
the customers to built their trust with the bank as well
repository of expert information in its database called
as it helps the bank to retain their loyal customers.
knowledge database. Bankers use these cognitive
systems to make strategic decisions. Now it's realistic This helps banks to identify fraud, detect anti-money
to imagine a magical combination of AI and human laundering pattern and make customer
mind that expands our mental skills and masters recommendations. Money launderers, through a series
scientific challenges. This hybrid technology may also of actions, portray that the source of their illegal
combine human mind with artificial devices to enable money is legal. With its power of Machine Learning
us to improve our physical or cognitive abilities without and Cognition, AI identifies these hidden actions and
facing any time, location and other physical helps save millions for banks. AI has enormous ability
constraints. to detect and minimize banking frauds. It reduces fraud

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