Banking and the Benefits of AI Technology
As the COVID-19 pandemic swept the nation one year ago, businesses operated under many restrictions. Banks were no exception. Hours were limited, as were the number of people allowed inside at one time. It was time-consuming and frustrating. As a result, many people chose banking via artificial intelligence (AI) as a more convenient option. And although the pandemic has slowed, the partnering of banking and AI has gained—dramatically.
For safety’s sake
Along with speed and convenience, safety strongly factored as to why many people switched to digital banking. Having as little physical interaction as possible during the spread of the pandemic gave customers a sense of safety. What these customers did not take into account, however, was that although digital banking kept them physically safe, they became vulnerable where their security was concerned.
Cybercrime rose alongside COVID-19
The pandemic became a prime opportunity for cybercriminals to exploit the world of online transactions. Last year, PaymentsJournal reported that nearly 40-percent of financial service organizations experienced increased cases of fraudulent activity. And, an added benefit to AI-aided banking emerged: Its technology had the capability to spot and curb cyber-fraud, thus helping to mitigate the damage of online theft and security breaches, as well as process data for anti-money laundering. The safeguards and innovation of AI technology in banking will continue to advance, keeping banks solvent and customers secure. Consider, for example “Conversational AI.”
The future of AI and banking
In a recent article for Analytics Insight, Meenu EG detailed the innovation of Conversational AI, which bolsters the benefits of digital banking by improving not only the customer experience but also that of bank employees, as it can perform very general and repetitive tasks. Additionally, Conversational AI can optimize costs and, perhaps most importantly, it has proven to be very effective in matters of fraud prediction and detection.
Finally, the growth of the AI-and-banking integration can be observed in the figures. Meenu EG pointed out the contrast in revenue from AI-powered banking between 2019—which was $13.7 billion—and the projected amount for 2025—estimated to be $48.3 billion. (Yes, $48.3 billion.)
So, in summation, the benefits of AI in banking include cost-effectiveness, improved customer satisfaction, increased safety and security, and overall efficiency. Could these innovations in finance be too efficient?
What about the human factor?
Understandably, there is cause for concern as bank employees may wonder about the security of their positions. The recommended mindset to take is that AI can enhance, not necessarily replace, the human banker. As Roey Mechrez recently stated in Entrepreneur:
In 2021, we should be able to overcome some of these problems by implementing the right systems: investing in platforms and systems, building trust to take the fear out of AI and managing change by reassuring staff that humans and machines can work together.
The EGC Group continues to keep up with the changes taking place in the world of banking and finance. If you have any questions about how we can help your financial institution stay successful, reach out to us today.