The Future Of Banking: AI in Banking

Advances in technology continue to profoundly affect the way different industries work. In particular, artificial intelligence is finding its place in different industries in a wide range of different functions. These developments are improving industries and working conditions and paving the way for increased customer satisfaction.

Banking is one of the sectors being rapidly transformed by AI technologies.  Many applications such as digital banking, mobile banking, real-time money transfers, and voice recognition technologies have now taken their place among fixed practices of banking.

So, what does the future of banking look like and what is the place of AI in the banking sector? Let's find out together.

Why Banking Needs AI

We mentioned that technological developments have also affected the banking sector. While the sector has been transformed in light of these technical developments, a completely different understanding of competition has also emerged.

It is not enough for this new banking to follow technological developments very closely. It must also put the consumer at the center of all these developments. The needs of the consumer have always been important. But the introduction of artificial intelligence in banking has created a customer profile that can now interact with the bank 24/7.

Customers often don't need a bank branch or bankers for banking transactions. Rather, they need sophisticated and up-to-date mobile apps or a well-functioning voice response system. With users embracing new technologies to such an extent, it would be a huge loss for banks to be left behind.

How Artificial Intelligence is Improving Banking

Artificial intelligence technologies have led to many different developments in banking. Before we take a look at different AI-based banking applications, let's examine the impact of AI in banking. 

RPA(Robotic Automation of Processes)

AI developments in banking show that many processes will be part of automation.  These jobs are repetitive and boring, like data entry or office work. Automating these jobs means that employees can attend to more important tasks that will increase their productivity. 

Advanced User Experiences

Artificial intelligence, especially in banking, is developing a deeper understanding of customers' wants and needs, even their moods. Thus, it offers solutions to increase customer satisfaction.

Forecasting Future Outcomes

In banking, AI can analyze vast amounts of data and make future predictions about customer behavior. For example, it can make decisions about money laundering or fraud risks by examining customers' behavior and spending patterns. In this way, it enables banks to save huge amounts of money.

Interactive Interfaces

This is a service that many of us use. Bank chatbots can analyze our sentences and emotions in a very realistic way. This way, they provide us with appropriate solutions. 

Better Decision Making

AI in banking, as we said earlier, can process huge amounts of data. Processing this data allows for accurate statistics and accurate predictions. This improves decision-making and business development processes.

So, how do banks benefit from all these opportunities? Here are some statistics on artificial intelligence in banking:

• 56% of banks state that they incorporate artificial intelligence technologies into their business processes like new products.
• 52% of banks use AI technologies for risk management.
• 80% of banks say they are aware of the importance of AI in banking.
• 75% of banks with over $100 billion in assets are currently working on integrating AI processes into their business.
• The most used artificial intelligence technologies in banking fields are automation of office work, risk management and fraud detection, and insurance.

Artificial Intelligence Applications in Banking

We learned about the benefits of artificial intelligence in banking and statistics on the subject. So what are the areas of use of artificial intelligence in banking? Here are examples of artificial intelligence in banking for you: 

Cybersecurity

One of the most effective uses of artificial intelligence is security. This is also one of the most important functions of AI in banking. AI technologies used in banking can prevent new threats by learning from past problems. It also maximizes your cyber security thanks to technologies such as face recognition and voice recognition.

Chatbots

We have mentioned this before, but we can elaborate a little more. First, chatbots improve customer relations and provide smooth customer service 24/7. On the other hand, these bots also create an area for banks to cut costs.

Predictive Analytics

We know how successful AI is in analyzing data. Artificial intelligence technologies used in banking also play a major role in improving sales processes by analyzing historical data. These algorithms not only learn from the past but can also make detailed predictions. In this way, the future development of the business can also be taken under control.

Robot Advisers

Robotic assistants or "robot-advisors" analyze the customer's needs and propose appropriate solutions. These assistants can advise the customer on many issues such as cash needs, investment opportunities, etc. Many of the notifications sent by mobile banking applications are examples of this.

Credit Score Determination

Artificial intelligence programs used in banking can calculate customers' credit scores using many different databases. This prevents banks from being defrauded or customers from over-indebting.

 What Banks Should Do to Use AI Effectively

We talked about artificial intelligence applications in banking, the benefits of using artificial intelligence in banking, and why banks may need artificial intelligence. So, what should banks do to complete this transformation? This section is a step-by-step AI transformation guide for banks!

Step 1: Change The Customer Engagement 

Many services provided by banks are no longer visible to users. Because all these services are provided by artificial intelligence technologies in banking. For example, sending money or opening accounts. But is this digitalization enough? The answer is as you would expect: No.

Customers need personalized banking. This means the development of digital banking. Digital and mobile banking should be developed first. Suggestions that meet the needs of the customer should be offered. In addition, customers should be able to find their bank with them 24/7. This includes different platforms.

Step 2: Change The Decision Making

You have earned the trust of your customers and you've hooked them. Congratulations, the first step is complete! Now it's time to improve your decision-making processes. For this, you first need to artificially classify your bank's past and present data and make it ready for analysis.

AI programs must analyze the data and draw appropriate statistics. Using this error-free data in decision-making processes will enable you to make more accurate decisions. Not only old data but also statistics about your employees' current work and productivity will contribute to the development of your business. 

Step 3: Build The Infrastructure

It is important to build your infrastructure very well. If you don't use a technology that works properly, what you have done in the previous two steps won't matter. Work with the right people for your technological infrastructure, store your data securely, and utilize API solutions.

In short, have a detailed and thought-out plan for change. This way you can manage a successful transformation process.

Future of Banking

There are predictions about the banking of the future. The banking of the future will be digital, just like the banking of the present. We are all sure of this. Artificial intelligence technologies have already revolutionized industries, even though they are only taking their first steps. In the future, it is possible to say that the banking sector will be completely transformed.

To give a small example, 3.6 billion people worldwide are expected to use digital banking by 2024. This means almost complete digitalization of banking.

Conclusion 

Artificial intelligence is changing and improving many industries, including banking. The use of artificial intelligence in banking is important for the development of the sector and customer satisfaction. At the same time, AI practices in banking have already started to transform banking practices.

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