Artificial Intelligence is helping banks transform operations from accounting to sales to contracts and cybersecurity. Banks are actively adopting new technologies for better growth prospects and to serve customers.
With data analytics, blockchain and machine learning, banks are future-proofing their offerings and services.
A computer system that can sense, comprehend, act and learn. In other words, a system that can perceive the world around it, analyse and understand the information it receives, take actions based on that understanding, and improve its performance by learning from what happened. And by enabling machines to interact more naturally with their environment, with people and data, the technology can extend the capabilities of both humans and machines far beyond what each can do on their own.
There are multiple reasons for the increased adoption of Artificial Intelligence in the banking sector which includes the immense competition in the banking sector, push for process driven services, introduce self service at banks, demand from customers to provide more customised solutions, creating operational efficiencies, increasing employee productivity, to help focus on profitability and compliance, vision to augment human work through the use of software robotics, to reduce fraud and security risks, manage huge volumes of data at record speed and derive valuable insights, to bring in effective decision making.
Areas Where Banks Are Adopting Artificial Intelligence
There are many areas where banks are utilising AI to streamline the processes. A few of them includes:
- Merchant Services
- Fraud and cybersecurity
- Risk Management
- Customer Service
- Financing and loans
- Wealth management
- Business process management
- Physical Security
- Asset Management
- Internal Audit
Which Indian Banks Are Using AI?
About 32% of financial service providers are already using AI technologies like predictive analytics, voice recognition among others, according to joint research conducted by the National Business Research Institute and Narrative Science. There are 12 banks which have gained continuous media attention for their AI initiatives over the last few years. The list includes:
- Bank of Baroda
- Allahabad Bank
- Andhra Bank
- YES Bank
- Canara Bank:
- City Union Bank
- Punjab National Bank
- IndusInd Bank
State Bank Of India (SBI): SBI is currently using an AI based solution developed by Chapdex, the winning team from its first national hackathon, “Code for bank”. On the front desk, it uses SIA chatbot, an AI-powered chat assistant developed by Payjo, a startup based in Silicon Valley and Bengaluru. It addresses customer enquiries instantly and helps them with everyday banking tasks just like a bank representative.
Bank of Baroda: BoB has set up of hi-tech digital branch equipped with advanced gadgets like artificial intelligence robot named Baroda Brainy and Digital Lab with free Wi-Fi services.
Allahabad Bank: In a media statement earlier, the Allahabad bank said that its app ’emPower’ is scheduled to get major enhancements like Chatbot and artificial intelligence based ecommerce payments.
Andhra Bank: Bengaluru-based AI startup, Floatbot has launched AI Chatbot integrated with Core Banking Servers of Andhra Bank, to digitally engage and automate customer support for its 5 Cr customers. Floatbot will also develop a chatbot for 20K+ internal employees of Andhra Bank to automate onboarding and training.
YES Bank: It has partnered with Gupshup, a bot platform, to launch ‘YES mPower’ – a banking chatbot for its loan product. Another AI product YES ROBOT is equipped to answer consumer’s banking related queries anytime, anywhere, without the hassle of waiting for on-call or searching online.
HDFC Bank: It has developed an AI based chatbot, “Eva”, built by Bengaluru-based Senseforth AI Research. Eva can assimilate knowledge from thousands of sources and provide simple answers in less than 0.4 seconds. Going forward, Eva would be able to handle real banking transactions as well. HDFC is also experimenting with in-store robotic applications and launched a prototype robot IRA (Intelligent Robotic Assistant).
ICICI Bank: It has deployed software robotics in 200+ business processes across various functions of the company, created mostly in house using AI features such as facial and voice recognition, natural language processing, machine learning and bots among others. The software robots at ICICI Bank are configured to capture and interpret information from systems, recognize patterns and run business processes across multiple applications to execute activities. One such product is its AI-based chatbot, named iPal, which helps in answering queries, helping in financial transactions and discovering new features.
Axis Bank: It launched an AI-enabled app that uses natural language processing to enable conversational banking that helps consumers with financial and non-financial transactions, queries and product information.
Canara Bank: It launched Mitra, a humanoid robot developed by Bengaluru-based Invento Robotics which helps customers navigate the bank. Another one Candi, which is slightly smaller than Mitra is supplementing the human resource.
City Union Bank: It launched the banking robot, Lakshmi. The robot can interact with customers on more than 125 subjects. Apart from answering generic questions, the robot is also programmed to connect with the core banking solution.
Punjab National Bank: In 2018, the bank announced its plan to implement AI in account reconciliation as well as using analytics to improve its audit systems.
IndusInd Bank: It has launched Alexa Skill, ‘IndusAssist’, using which bank account holders can conduct financial and non-financial banking transactions with Alexa, Amazon’s virtual assistant.
What Are The AI Adoption Challenges Faced By Banks?
Here are a few key challenges faced by the banks:
- Lack of credible and quality data
- Diverse language set
- Lack of skilled engineers
- Unavailability of people with right data science skills
- Lack of clarity of business goals
- No clear internal ownership of testing emerging technologies
Future of Artificial Intelligence in Banking Sector
According to Deloitte, AI will provide the foundation for increased product and service innovation. Further, artificial intelligence has the potential to transform customer experiences and establish entirely new business models in banking. To achieve the highest level of results, there needs to be a collaboration between humans and machines that will require training and a reassessment of the future of work in banking. Also, mass customisation is the key to unlocking significant opportunities in the future and can be tapped only through technologies like AI and blockchain.
The banks are harnessing the power of AI to deliver new customer experiences with various solutions and are setting new standards for the Indian banking ecosystem, thereby charting a new wave by embracing tech intensity.