Page 12 - Risk Management Bulletin April -June 2021
P. 12

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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