Page 25 - Banking Finance October 2024

ARTICLE

analysing online interactions, preferences, and sentiment, transparent and fair in their AI-driven marketing efforts.
banks can tailor financial products and services to By prioritizing compliance and using ethical AI
individual customer needs. This targeted approach frameworks, banks can maintain customer trust and follow
improves customer satisfaction and loyalty. Moreover, regulations. However, the act also presents chances for
Generative AI enables banks to run personalized innovation and competitiveness. Banks that use
marketing campaigns on social media platforms, generative AI responsibly can stand out by providing
optimizing reach and engagement. Using Generative AI personalized customer experiences while still following
to understand and respond to social media behaviour regulatory standards. Overall, while the Digital India Act
empowers Indian banks to build stronger connections with poses challenges for banks using AI in marketing, it also
customers, driving business growth and competitive edge creates an environment that supports the ethical adoption
in the digital landscape. of AI and innovation in the banking sector.

Beyond marketing, Generative AI is also helping banks Looking ahead, the future of Generative AI in Indian
enhance security and fight fraud. Advanced algorithms banking appears bright. As technology advances and
can analyse transaction data in real-time to spot suspicious consumer expectations evolve, banks will increasingly rely
activities and potential threats, allowing banks to take on AI-driven solutions to provide personalized and
proactive steps to protect their customers' assets and engaging experiences to their customers. By embracing
information. Generative AI and effectively harnessing its capabilities,
Indian banks can stay ahead of the curve and drive
Challenges and Future Outlook: sustainable growth in the digital era.
Despite its immense potential, using Generative AI in
Indian banking also comes with certain challenges and In conclusion, Generative AI is transforming marketing
considerations. Banks need to address privacy concerns, strategies in our banking industry. It provides exciting
data security risks, and ensure regulatory compliance as chances for engaging customers, tailoring services, and
they implement AI-powered marketing strategies. innovating. By using AI-powered solutions, banks can cre-
Additionally, finding skilled talent capable of leveraging ate compelling content, deliver personalized experiences,
and managing Generative AI technologies remains a and improve security. This ultimately boosts customer
significant obstacle for many organizations. satisfaction and loyalty. As technology advances rapidly,
the use of Generative AI will keep shaping the future of
The new Digital India Act 2023 is going to significantly banking marketing in our country. It unlocks new possi-
impact how banks in India use generative AI for bilities and drives sustainable growth in the digital era.
marketing. The act is focused on protecting people's
privacy, making sure AI is used ethically, and protecting (Source: Coursera, Youtube Videos, Various Economic
consumers. Banks are need to follow strict rules to be News Papers)

Bank deposit growth lag sparks debate among bankers
The lag in deposit growth compared to advances has triggered a debate among top bankers and regulators, includ-
ing the Reserve Bank of India (RBI). Speaking at the Fibac conference, M.V. Rao, Chairman of the Indian Banks'
Association and CEO of Central Bank of India, highlighted that mutual funds offer higher returns than bank deposits,
leading to the shift in household savings. He noted that banks' ability to offer competitive returns is limited due to
regulatory restrictions on how deposits can be deployed.
Bank of Baroda CEO Debadatta Chand suggested that banks need to innovate by offering bundled products with
savings accounts to attract deposits. He argued that banks must evolve beyond offering generic deposit products to
keep up with changing customer preferences. While the deposit-credit mismatch has raised concerns, many industry
leaders believe it is a temporary issue rather than a structural problem.

BANKING FINANCE | OCTOBER | 2024 | 23