Before discussing how Artificial Intelligence and Machine Learning are transforming the banking industry, both terms need to be understood. AI is a complicated concept, but for the sake of writing space, we will define it as simply as possible. It is when non-living entities, such as a computer or program that controls your manufacturing plant, can think for themselves. The system that the AI is attached to will be able to make decisions based on perimeters and examples taken throughout the daily operation.
Machine Learning is a little bit different but still relies on the device being used to analyze and make decisions. These decisions will be based on mathematical algorithms. The machine will analyze all aspects of the operation that they deal with, and make changes as needed to maximize their efficiency.
Combined together you have a powerful set of tools that can transform the banking industry forever. Let us take a look at a few reasons why this is so.
- Fraud Detection-One of the biggest expenses within the banking industry is fraud. Whether it is by customers, employees, or hackers. People want money for free, and the best way is through the banks that have an excess amount of it. AI and ML can help prevent this by picking up minor discrepancies that need to be investigated further. Small things that the average human would not notice, let alone research and find an answer for.
- Customer Service-One aspect that banking involves is customer service. People have questions about their accounts. They want answers now, which is where the automated services come in. Machine Learning in banking can lead the Artificial Intelligence systems to prepare answers for all the basic questions, and adapt for each specific inquiry and account. You have all been on a website that has a chatbot, which is what these two systems can do together. The bot will answer most questions and can adapt to each and every chat that is started through the app.
- Account Decisions-The two systems can also work together to make decisions on accounts or loan applications. All the information will be added into mathematical algorithms and will process a risk number for loans, or account numbers for new ones that are being opened. It will come to the point that basic tellers will no longer be needed, except for a few rare cases.
- Compliance-Each bank is required to follow the same set of rules in any given area. It can be hard for them to keep up with all of them, especially new rules and regulations that come out. The AI and ML will process all the latest information that has been instigated, along with all the rules that have already been set into place, and will make all decisions based on the rules. Compliance will be automatic and flawless.
Those are the basic ways in which Artificial Intelligence and Machine Learning will transform the banking industry. It has been said by numerous experts that the jobs within the banking industry will be reduced by a substantial amount. This may be the case, for those that refuse to learn new aspects of the job.
The tellers and loan officers that are willing to learn how to use all the innovative technology will be in high demand. The more you learn, the more likely you will be to secure your job in the banking industry. The tasks will change, and the jobs will be fewer in each location, but overall, the workforce will just need to shift themselves into the new world. The world of technology and online platforms can make decisions on the fly.