IDC says the banking industry leads the way in AI adoption, with $5.6B expected to be spent on AI solutions by 2022, including automated threat intelligence, prevention methods, and fraud analysis systems.
Along with important recent analysis by IHS Markit, showing the business value of AI in banking worldwide is expected to reach $300B by 2030.
The main bulk of AI/ML applications deal with routine and internal workflow matters such as:
- Error reduction
- Fraud detection
- Connected machines
- Administrative workflow
Contrary to popular thought, these cost savings don’t necessarily mean banks have to replace humans with automation.
In relation to client service and customer engagement, AI works with humans, carrying out back-end technical tasks and making workflows more efficient. This works alongside providing assistance and recommendations for humans.
This frees up the frontline staff to increase the time spent focusing on high-value tasks and engage in more face-to-face contact with customers.
“Contrary to popular thought, these cost savings don’t necessarily mean banks have to replace humans with automation”.
Predictive customer profiling
For the first time, the banking industry can bring together all internal and external data, with the added benefit of developing predictive profiles of customers and members in real-time.
With consumer data that is so completely accessible, financial institutions of all dimensions can know their customers in a much more direct way, while being able to also offer advice for the future.
According to Deltec Bank, “This highly improved and detailed use of data will intensify the consumer experience along with increasing customer security.”
Who is using AI?
In order to process customer emails more efficiently and save the customer service team’s valuable time, UK bank NatWest has developed AI models to quickly scan and route emails according to topic and category.
The bank started by building a single decision making layer which drew on the relevant data of its customers. This involved understanding tasks carried out by frontline workers and programming those tasks into a prototype driven by Artificial Intelligence.
The Future of Banking
The availability of AI-enabled solutions, allows banks to deliver customer-driven experiences, providing that their application strategy and methodology is fully integrated and planned according to business needs.
AI and ML will continue to greatly benefit the banking industry, but the technology’s full potential can only be experienced if the banking infrastructure is able to support the technology and data needs.
As banks increasingly become reliant on Machine learning to provide predictive analytics, they will need to meet new regulatory and interconnectivity demands.
“…the technology’s full potential can only be experienced if the banking infrastructure is able to support the technology and data needs”.
Experts are saying, real reform will occur when financial institutions integrate this capability with the expanded services of open banking and connected devices.
To finish up…
It seems more and more that decisions are taken out of the hands of even the top executives, in favor of an AI rated response. And quite right too, so many efficiencies can be gained by implementing simple decision making – especially if it negates the added layer of human error.
Disclaimer: The author of this text, Robin Trehan, has an Undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.
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