The AI-ML Combo: Changing the Way People Interact with Money
Artificial Intelligence (AI) and Machine Learning (ML) have been at the heart of digital transformation across several industries. While not an exception, the BFSI industry has been relatively “change-resilient” and has seen some tech adoption rates over the last two decades.
Studies reveal that 7 of 10 financial service providers are leveraging ML to refine credit scores, anticipate cash flow events, and identify fraudulent activities.
Modernizing financial institutions and heritage business policies and frameworks without disturbing the existing structure is a significant hurdle. AI and ML are a fantastic way to cope with framework modernization, enabling companies to collaborate with other FinTech management.
Let’s deep-dive into the benefits that first movers are enjoying, and the opportunities still left undiscovered.
Fraud Detection
Over the past decade, banking frauds have become more complicated and challenging to monitor. The RBI has revealed that bank frauds in India surged 159% during 2019-2020, accounting for nearly INR 1.48 lakh crore.
AI and ML have enabled successful fraud detection as well as foreseeing patterns and raising red flags. ML allows banks to run through large data volumes and spot oddities, such as ID forgery, fraudulent transactions, loan scams, and email phishing. On the flip side, AI lets banks review customer history, fund-flows, transaction history, and behavioral analytics, which conventional human processes fail to point out.
Personalized Customer Engagement
Conversational AI-based virtual assistants have turned the tables by allowing banks to deliver relevant, personalized, and real-time customer support. Customers find it better to say “Hi” to a web assistant instead of dialing the service helpline and stay on call for long.
Thanks to natural language processing (NLP), these AI-powered virtual assistants accelerate customized support and query resolution, that too with zero human intervention, allowing banks to boost retention rates and customer satisfaction.
Credit Service and Loan Decisions
Providing credit is a major banking function; however, offering loans has always been a big risk. Generally, banks depend on heavy historical credit records to figure out the risk appetite of applicants. AI-backed underwriting provides a more comprehensive view of an applicant, helping financial institutions make well-informed decisions in authorizing loans.
It brings together extensive and conventional data - business, social, and internet data, as well as unstructured data. AI and analytics-driven methods identify suspicious behavior, provide multi-variant projection, and enhance risk management to improve the accuracy of credit card fraud identification.
The Future of BFSI is Already Here...
BFS enterprises that thrive on data-based techniques and AI are changing the way people interact with money. In India alone, the FinTech adoption rate stands at 87%, trumping the global average of 64%.
These innovative technologies have empowered the BFSI space to develop a smooth digital journey across the client lifecycle by automating workforce and processes. Also, this has tremendously curbed cyber threats and boosted customer retention.
Embracing digitization and AI will bring the potential of advanced data analytics to tackle fraudulent transactions and level up compliance.
To ‘win the war of skills’ the Indian Institute of Technology-Roorkee, in collaboration with WileyNXT, has launched the Artificial Intelligence in BFSI program - India’s first-of-its-kind online program made for BFSI professionals.
For over 200 years, Wiley has been helping people and organizations develop the skills and knowledge they need to succeed.
Miles Education is always committed to your career success and brings to you new-age certifications in Finance and Emerging Technologies. We have partnered with WileyNXT to offer PG Certifications in AI from top IITs/IIMs in AI, ML, Deep Learning, and Analytics.
