When it comes to integrating the latest technology, banks are usually among the last to make the transition. The reason is multi-fold: legacy systems, complex compliance requirements, old-school cultures and an understandably cautious approach to new technologies. But that is about to change. Banks are slowly embracing a host of new technologies, including artificial intelligence technology.
Artificial intelligence is the blend of three advanced technologies – natural language processing, machine learning and cognitive computing. Artificial intelligence aims to simulate the intelligence of humans in machines. The prime motive for creating this intelligence is to overcome human limitations – scalability, subjectivity, and speed.
In the banking industry, these three limitations can prove to be extremely detrimental. Let us look at how banks are deploying artificially intelligent systems to overcome these barriers.
Improving customer experience with chatbots
The biggest cost-saving opportunity for banks come from automating the frontline. Chatbots solve the scalability, subjectivity and speed issues that any large organization faces. Benefits that chatbots bring to the banking sector include:
- They tackle the issue of scale – Chatbots can handle thousands of queries without compromising on quality and speed. They help banks extend efficient service to an ever-growing customer base.
- They reduce the load on customer service agents – By responding to basic enquiries, they enable agents to act in a consulting, advisory capacity.
- They reduce the customers’ waiting time – Most banks have a large number of departments, and agents frequently transfer the call between one department to another. The wait times between call transfers can turn out to be frustrating for the customer. As chatbot software is integrated with all the departments’ CRMs, they have a 360-degree view of the customer. The customer finds that his issue is resolved at first contact and his experience turns out to be smoother.
Over time, chatbots amass large, valuable quantum of data specific to the customer. They can use this data wisely to make recommendations on products most relevant to the user – which brings us to the next benefit –
Making personalized recommendations to customers
Chatbots are revolutionizing customer relationship management at a personal level. Bank of America’s Erica is a typical example. Based on the customer’s spending patterns, Erica suggests investment options, education content to save money, etc. It also helps them pay their bills, increase their credit score, etc. As Erica uses natural language processing, it understands the customer’s requirements over text and makes him feel like he’s talking to a human being, rather than a machine.
Artificial intelligence has the capability to identify fraudulent behavior while it is happening. Using predictive analytics, it can identify patterns which lead to suspicious behavior. Location data can assist in this detection process.
Anti Money Laundering (AML) detection algorithms are a classic example. AML refers to a set of procedures, laws or regulations designed to stop the practice of generating income through illegal actions. Most of the major banks across the globe are shifting from rule-based software systems to artificial intelligence based systems which are more robust and intelligent to the anti-money laundering patterns. The predictive analytics company called Tresata has developed technology that can greatly streamline AML processes.
Here are some ways in which major global banks are using artificial intelligence:
- JP Morgan Chase has invested in a technology called Contract Intelligence (COiN) platform designed to “analyze legal documents and extract important data points and clauses”. Manual review of 12,000 annual commercial credit agreements normally requires approximately 360,000 hours. Results from an initial implementation of this technology showed that the same amount of agreements could be reviewed in seconds.
- Wells Fargo reaches out to its customer through its chatbot on Facebook Messenger. The chatbot helps customers manage their account information.
- Citibank has made a strategic investment in Feedzai, a leading global data science enterprise that works in real-time to identify and eradicate fraud in all avenues of commerce including online and in-person banking. Feedzai conducts large-scale analyses, any fraudulent or questionable activity is identified and the customer is rapidly alerted.
If you want to know more about how you can use artificially intelligent tools in your company, please get in touch with us.