Page 42 - BF Cover January 2021.cdr

ARTICLE

Importance of Artificial Intelligence in Effective decision-making:

Banking Sector: Cognitive systems that think and respond like human
experts, and provide optimal solutions based on available
In present era the role of banks are very important for the
data in real-time. These systems keep a repository of expert
development of financial life cycle for modern society as it
information in its database called knowledge database.
handles cash, credits and various financial transactions. In
Bankers use these cognitive systems to make strategic
other words we can say the banks are now financial
supermarket like other shopping centers of essential items. decisions. Now it's realistic to imagine a magical combination
In past the handling of financial transactions was not that of AI and human mind that expands our mental skills and
easy because entire process was dependent upon the human masters scientific challenges. This hybrid technology may also
combine human mind with artificial devices to enable us to
efforts only, a lot of paper work and a chain of human being
was required to manage the regular transactions with improve our physical or cognitive abilities without facing any
accuracy. time, location and other physical constraints.
To improve the traditional phenomena banks primarily used Cognitive process automation:

computers where they had a detailed record in their This mechanism ensures complete automation of a range
databases. In the chain of that various channels were added of information-based, costly and risk-prone banking services.
like ATMs, Mails, Internet Banking, mobile banking etc, that This helps in securing Rate of Interest, reduces costs and
made a revolution in banking sector and provided a ensures precise and fast processing of services at each stage.
structured path to move on. This smooth operation of the It is a process that takes care of learning and improvising
banking world that is done through computers and network on previous experiences automatically and adopts an
is possible only because of the Artificial Intelligence. AI advanced approach without human intervention for its
technologies are making banking processes faster, money performance through constant machine learning.
transfers safer and back-end operations more effective and
efficient. Customer Satisfaction:
Customer satisfaction is the first and foremost important
Banks are deploying various artificial intelligence techniques factor of any bank. The banks provide personalized and most
to enhance the customer delight by enabling frictionless, 24 efficient services to each and every individual customer. AI
x 7 customer interaction. AI in banking applications is not helps in increasing revenue, faster decision making and
just limited to retail banking services, and it also extends its having a good customer relationship. Having AI not only
benefits to the back and middle offices of investment banking ensures that the customers are happy but it also helps the
and all other financial services. There are numerous aspects banks to maintain and have well organized back offices.
of AI illustrated below that will enlighten on its importance Based on past interactions, AI develops a better
in modern banking system. understanding of customers and their behavior. This enables
banks to customize financial products and services by adding
personalized features and intuitive interactions to deliver
meaningful customer engagement and build strong
relationships with its customers.

Detection of Frauds & Prevention:
Fraudulent activities are one of the most fearful concerns
amongst the people and banking industry. Especially when
a financial fraud occurs, the effected individual finds it very
difficult to cope and recover from such losses. Whenever any
fraudulent activity noticed by bank and if it is immediately
brought to the attention of the bank, then the bank
authorities takes prompt and necessary action to handle the
incident in a very organized manner, and this is because of

42 | 2021 | JANUARY | BANKING FINANCE