Robots Instead Of Bankers. How Can AI Replace People?
The are a lot of spheres of application of artificial intelligence in the banking industry: precise processes allow to minimize the influence of the human factor, automation leads to a reduction in costs. Clients of the bank receive better personalized recommendations from the online support service and can manage their finances and investments more efficiently.
Recently banks have been actively implementing AI technology ranging from the front office to the back office.
Earlier, the customer made a call to the bank in a problem situation and communicated with the contact center employee. However, many banks are starting to implement a chat bots online system. So when the client calls, he has to speak to a robot that can provide the necessary information. The customer can communicate with robots by phone calls, SMS or using messengers and chats on the bank's website. AI allows a chat bot to instantly analyze a person's needs and offer suitable solutions in case of any problems. Some financial chat bots allow users to make purchases on the Internet and even pay bills. Chat bots simplify user interaction with the bank, reduce financial costs for the call-center and SMS notification services.
The most popular chat bots are Erica, created by Bank of America, COiN, made by JPMorgan Chase, ENO, developed by Capital One, and Russian Talk Bank with 80% of customer requests processed by bots.
Robo-advisors — financial advisors for investment management
Robo-advisors are very popular both among start-ups and among traditional financial institutions. This is an effective alternative to human financial advisors when speaking about choosing an investment portfolio. It is believed that due to the ability to collect and analyze information about the foreign exchange markets, AI algorithms are able to give accurate forecasts of the stock market as a whole. Robots are able to track fluctuations in prices in financial markets and give recommendations — to sell or buy securities depending on the purpose. The most popular robo-advisors are Personal Capital, Betterment and Wealthfront.
Banks can also create smart electronic wallets with the help of AI. They are able to detect the habits and needs of the user and give an advice on managing personal finances. Most often, these applications teach to save up money as carefully as possible, achieving financial goals without significant losses. The most popular are Apple Wallet, Clea and Neat.
AI can become a shield that protects banks from external and insider threats. For example, by analyzing the frequent places of customer purchases, AI can determine who exactly makes this purchase and find signs of using a customer's plastic card by third parties. There are a lot of algorithms that detect fraud and this list is constantly expanding. The leaders are Easy Solutions and Decision Intelligence from MasterCard.
One of the main tasks of the bank is to make decisions on the issue of loans. Credit scoring is a person's credit rating system based on numerical statistical methods. The use of AI in the credit scoring will allow banks to shorten the time of making a decision to grant a loan and improve the efficiency of the solvency assessment. The most popular credit scoring systems are Lenddo and ZestFinance.
The use of artificial intelligence for risk management is helpful for the evaluation of unstructured data — information that does not have a clear description in structured rows and columns. Natural language processing technology (NLP) uses advanced algorithms for text analysis to get ideas from unstructured data. The most popular ones are Brach and Kreditech.
But despite the gradual incorporating AI into banking, the administration is not yet ready to fire employees and let artificial intelligence to manage assests. While control still remains in the people’s hands, the process of robotization is going much faster than we think.