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Impact of AI in the Banking Sector UK
Thursday June 6, 2019
The achievements of the 21st century cannot be mentioned without speaking about Artificial Intelligence technology which has predominantly played as a big root of success.
Artificial Intelligence not just makes computing smarter, but also empowers them with human-like cognition and ratiocination. AI represents stimulated human intelligence, becoming an effective and powerful way of creating brilliant robots who think in almost similar manner as humans.
Of all other industries adopting the technology, banking and finance are also greatly influenced by AI solution over the years. Injected with expert algorithm, AI machines contain features like self-learning, speech recognition, reasoning, error detection and several more.
The result is improved efficiency, cost optimization, reduced maintenance, predictive analysis and ample precision while performing banking operations.
Due to massive promises of constant evolutions and usefulness, AI has entered banking and finance sector and exceeded beyond Google Assistant, Siri and Alexa.
Read Also: Significant Impact of AI in Day to Day Life
In the following section, we explore the impact of AI in banking sector in UK.
How has AI changed the banking sector?
Banking is a work that needs perfection and has little or no space for any errors to be registered; this is why AI has been greatly incorporated in the banking sector over the years to make banking easier and to get the required job done more effectively.
Ever since the incorporation of AI in the banking sector, major impacts and influences has been registered which wasn’t the case before.
Some of the impact of AI in the banking sector includes:
1) Reducing cost
AI has greatly reduced the cost for banking sectors through low value add activities with the use of the robotic process automation [RPA]. AI has helped banks to reduce the time and resources which is constantly spent on the development of a numbers of processes.
Robotic process automation has solved so many previous challenges which are usually faced by banks like difficulties that can be seen in multiple ledgers, systems, and subsystems.
It is believed by many experts that artificial intelligence will save the banking sector an estimate of up to 1 trillion by 2030.
2) Better Management
Before AI was incorporated into the banking sector, many companies turned to bank experts for advice on how they could better maximize their profits as well as minimize their taxes.
This wasn’t always a win-win situation for both parties as most of the predictions which were given by these experts were incorrect.
Thanks to the era of artificial intelligence in banking, customers who need advice from bank experts can ask the AI program of banks about any information or question related to a company.
The banks powered AI program will provide the required information in full report, facts, and references. This makes management more effective and reliable for both the bank and customers.
3) Building a better customer experience
The adoption of AI systems by banks has equally led to better customer services; banks are now more organized and have a clear idea on the need of their customers which has led to high customer satisfaction.
With the ability to determine the preferences and needs of customers through AI, banks can improve their services in order to attract new customers.
Banks use the advantages that come with having AI in their disposal in order to customize products based on the needs of their customers by analyzing their behavioral patterns through the combination of information from a previous transaction, their search history, social media sites, and queries.
The most popular form of AI in banks today is the use of chatbots. Chatbots are made available by banks to provide aid to customers in order to make payments, check balances, check transfer history, check their balance as well as carry out transactions.
AI has helped banks to better understand their customers which as a result have led to the building of a more hospital atmosphere between banks and customers.
4) Fight against fraud: Ensuring more security
The banking sector has always been a victim of fraud and constantly challenged by cyber-attacks prior to the inclusion of artificial intelligence. Cybercrime is reported to be costing the global economy a massive sum of $600 billion.
This is why so many AI and machine learning solutions have been deployed in the banking sector to easily detect any form of fraud at the exact time.
The banking sector all over the world has taken a step forward to eliminate this constant threat through the adoption of automated fraud detecting solutions throughout the entire banking systems.
Anomalous detection is used in order to increase the accuracy in detection of credit card frauds and finding money laundering solutions.
It is difficult for anti-money laundering (AML) to be detected and identified, but intelligent AI-driven solutions based on data, contexts, and networks serve as a concrete solution to this problem.
In a way, these intelligent approaches also help legitimate transactional activities which are sometimes mistaken for fraudulent move to be identified as legit more often.
Read Also: 10 Best Mobile Banking Apps UK 2019
5) Customers can now know their future prospects and returns
Through targeted AI solution which is available in banks today, customers can get constant information on the various available updates on offers which are available.
They’ll be able to build on their current assets and also increase their returns. Customers don’t have to start right from scratch because the AI does all the required work for them.
6) Personalized Banking
Artificial intelligence truly brightens up the financial sector when it comes to providing the additional benefits and comfort to the individual users.
In banking sector, artificial intelligence provides the smart Chabot’s which enable clients with inclusive self-help solutions which reduces the workload of call centers. Several apps offer personalized financial advice and help individual users to achieve their financial goals.
Forward thinking industrialists takes the robotic process automation when they want to cut operational costs and the productivity.
Intelligent character recognition makes possible to automate variety of time-consuming tasks that used to take thousands of manual hours to complete the same work.
Employing robotic process automation for high frequency repetitive tasks eliminates the risks of human error for financial institutions.
8) Portfolio Management
Banks are focused to make customized portfolio profiles for the individual customers based on their investment limits, patterns, and their preferences.
AI helps automate the process of building precise and deeply analyzed customer portfolio that resembles the same caliber as human professionals.
9) Enhanced productivity
One of the biggest advantages of leveraging artificial intelligence in banking domain is to experience significant drop in the required manpower.
Using Artificial intelligence solutions, UK banking sector would provide a revolutionary model for delivering solutions where people can use AI-enabled software for mundane tasks so that they could spare more time to focus on the other important things.
10) Process Optimization
Automating the high volume of low-value functions in banking is one of the most outstanding attribute of AI applications in banking.
John Pierpont Morgan who was a famous and influential banker in the United States of America during the 19th and early 20th century began using bots in order to facilitate the automated processing of internal IT requests, including the attempts of employees to reset their passwords which they used for work.
This was a report which was given by McKinsey.
11) Rapid transactions
There are always a lot of customers who need to be attended to in banks; shortage of personnel’s might delay transactions which a customer might need to carry out.
With the use of AI, customers can be attended to without having to displace their selves or wait for long with the help of AI programs in banks such as Chabots.
This increases the rate in which customers are attended to which directly leads to more transactions being carried out. This also encourage customers to carry out their required banking activities as they know that they can always maximize their time and effort without stressing up to complete a transaction.
The banking sector is an industry that needs to be at its absolute best at all time, just a simple mistake can have unimaginable consequences.
This is why AI is being incorporated into the banking sector so that all the shortcomings which are usually faced can be negated with more efficiency. Artificial intelligence technologies clearly have a great impact on UK banking and finance service sector.
In the next 5 years, we will see more banks taking the advantage of this advanced technology to establish a system where humans and AI solutions work together to multiply operational efficiency.
As the investments in artificial intelligence will increase, it will instigate a new era of innovation, competitiveness and profitability for the existing banks, creating better, brighter opportunities for everyone.