Digital disruption is about redefining industries and changing the way businesses operate. Each sector is evaluating options and adopting ways to create value in a technology-driven world. The banking sector is seeing exceptional changes: above all, an increase in customer-centricity.

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Application of arti cial intelligence in
banking
Digital disruption is about rede ning industries and changing the way
businesses operate. Each sector is evaluating options and adopting
ways to create value in a technology-driven world. The banking sector is
seeing exceptional changes: above all, an increase in customer-
centricity.
venkat vajradhar
Jan 6 · 3 min read
ech-savvy customers who are exposed to sophisticated technologies in
their daily lives, expect banks to offer seamless experiences. To meet
these expectations, banks have expanded their industry landscape to retail,
IT and telecoms to enable services such as mobile banking, e-banking and
real-time money transfer.
These advances enable customers to access many banking services at any
time, anywhere, and at their fingertips, which can be costly for the banking
sector as well.
The integration of the banking and IT, telecom and retail sectors
transmitted critical information through cyberattacks and fraudulent
virtual networks. These events not only affect the profitability of the banks,
but also the banks’ confidence and relationship with customers.
Learn more about: What Can AI Do for Cyber Security?
The rise of online security threats in banking transactions has tightened
government regulations. These terms can be used to monitor online
financial transactions, but this impedes banks’ ability to sustain the digital
T

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transformation. Banks are unable to invest in technology because they need
to maintain a capital adequacy ratio according to the guidelines of the
international regulatory framework.
Therefore, banks are vulnerable to competition faced by nimble Financial
Technology Players (FinTech), which do not need to maintain a capital
adequacy ratio. According to the 2016 World Retail Banking Report, more
than half of consumers worldwide are likely to swap their banks with this
Player1.
AI in the banking and finance industry
Banking on Artificial Intelligence:
The use of cognitive technology with Artificial Intelligence (AI) brings the
benefit of digitization to banks and helps them to compete with Fintech
players. In fact, according to research by the National Business Research
Institute and Native Science 2, 32% of financial services firms are already
using AI technologies such as predictive analytics and voice recognition.
Artificial intelligence is the future of banking (the importance of AI
technology through industry) because it brings the power of sophisticated
data analytics to deal with fraudulent transactions and improve compliance.
The AI algorithm achieves anti-moneylending actions in a few seconds. If
not, it can take hours and days.
AI allows banks to manage record-level high-speed data to get valuable
insights from it. Features such as AI bots, digital payment advisors and
biometric fraud detection systems lead to high-quality services for a wider
customer base. All these increased revenues reduce costs and increase
profits.
AI strengthens banks’ competitiveness by:
Improved Customer Experience: Based on past interactions, AI builds a
better understanding of customers and their behavior. It enables banks to
customize financial products and services by adding personalized features
and intuitive interactions to provide meaningful customer engagement and
establish strong relationships with their customers.
Predicting Future Results and Trends: AI helps banks to predict future
outcomes and trends by analyzing past behaviors, with the power to predict
future scenarios. This allows banks to detect frauds, identify the anti-
moneylending model, and make customer recommendations.
Moneylenders, through a series of actions, portray the source of their illicit
money as legitimate.

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With the power of machine learning and knowledge, AI can identify these
hidden actions and save millions for banks. Similarly, AI can detect
suspicious data patterns in enormous data to help manage fraud.
Furthermore, with its key recommendation engines, AI has previously
studied how to predict the future behavior of data points, which helps banks
to successfully market and sell.
Cognitive Process Automation: This feature enables the automation of a
variety of information-intensive, expensive and error-prone banking
services, such as claim management. It secures ROI, reduces costs and
ensures accurate and fast processing of services at every stage. Cognitive
process automation automates a set of tasks that improve their previous
iterations through consistent machine learning.
Fintech Arti cial Intelligence Banking
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