By: Benu Mukhopadhyay, Lecturer at The University of Law Business School
The banking and finance sectors have been unduly complex involving expensive manpower, difficult quantitative assumptions and slow processes. Generative AI (Gen AI) is an advanced form of using artificial intelligence to increase efficiency and customer engagement encompassing faster algorithms in various ways:
Fraud Detection and Risk Management
Gen AI can analyse vast amounts of data to identify unusual patterns of transactions and flag this potentially fraudulent activity in real time. Financial institutions can then mitigate risk and protect customers’ assets more effectively by enhancing customers’ trust and security. This process needs further development as many customers have been locked out of their account whilst making large transactions and data security is still an issue.
Enhanced Customer Service
Banking has evolved using Gen AI with the use of chatbots and virtual assistants increasingly tackling vast number of enquiries and transactions as well as providing live news feeds and providing the latest public information. This around the clock information is beneficial for customers travelling through different time zones and generally for people who work non-standard work times. These tools have been proven to show increased customer loyalty and satisfaction. Some demographics are still struggling to come to terms with this technological change from a historical human interface.
Streamlining Operations
This sector produces regular regulatory reports and use of Gen AI is optimising complex processes reducing costs and improving productivity. Tools such as natural language processing (NLP) can automate the extraction, summarisation and analysis of information utilising data analytics to produce these regulatory reports. The idea is to allow these tools to do lesser tasks of mundane duties releasing employees to do more strategic tasks. There is a time lag for these sectors to accept these tools in their daily activities.
Personalised Financial Advice
Gen AI can analyse customer data and offer optimal investment advice and product offerings which is tailored to the customer such as suggesting specific actions such as ‘next-to-buy’ and answering real-time questions. This enhancement of engagement and customer experience produces high customer satisfaction as well as high conversion rates for the sector. This approach can take care of personalised data handling anomaly providing confidentiality and protection. Customers are still unsure of the privacy when divulging information and are wary of the record keeping issues that may arise.
Future of Banking and Financial Sectors
AI technologies continue to evolve in innovative ways for growth but requires significant initial investment in infrastructure and talent. Customers demand has changed, and Gen AI can offer personalised services perhaps through marketing awareness encapsulating various digital marketing activities these customers will be more informed. The sector has been slow to implement changes due to its regulatory frameworks requiring several processes fraught with time lags. Development of financial software for various applications in this sector such as Codey can enhance the quality and speed via programming. Gen AI tools can streamline these processes and increase efficiency, productivity in this competitive landscape.
