The impact of artificial intelligence on the banking sector

The impact of artificial intelligence on the banking sector

There is no doubt that artificial intelligence (AI) is impacting most industries. AI can accomplish more with less, from manufacturing to telecommunications to catering. At the same time, it is a powerful tool for businesses to meet or exceed consumer expectations.

You might not realize that domestic and offshore banks are also using AI in many ways. Two goals drive the desire to make the most of this resource: reduce costs while increasing profits, and provide a level of convenience that drives customer loyalty.

Here are some of the ways AI is changing the way many banks do business.

Streamline front office protocols

In the financial world, the front office refers to conversational banking. This happens when you walk into a bank to make a transaction. You may have to wait in line if other people are already there, or you may have to wait for a bank officer to show up to help you with the transaction. While it’s good to get help, it can also be frustrating to have to wait more than a short time.

AI can reduce wait time by streamlining the processes and protocols used for front-office banking. Although you may need to speak to an agent, most of the necessary data can be collected while you wait. The result is that time passes faster and the agent already has relevant information for your transaction. Even if you use video conferencing to contact an offshore bank officer, this process can save you a lot of time and ensure things are processed faster.

Tools for personal financial management

You may have noticed that there are many tools to use when logging into your bank account using secure login credentials. Some involve analyzing the transactions you have made in the current and past periods. At a glance, you can get an idea of ​​how much you’re spending on dining out, grocery shopping, or a number of other expenses.

This is because the AI ​​drives the software that categorizes your transactions into specific groups. Along with giving you insight into where you’re spending money, the AI ​​can suggest changes to your account that will earn you more interest or put you in a better financial decision.

Acceptance and evaluation of credit, mortgage and loan applications

Remember when applying for a credit card or a loan was cumbersome? You had to fill out a mountain of paperwork, submit it to the Right Bank staff, and then wait for a response. If something was unclear, it meant phone calls and more waiting. Things could get even more complicated when the loan was for something more complex, like buying a property.

AI helped smooth the whole process. Assuming you are looking for a credit card or mortgage through the domestic or offshore bank where you have accounts, most of the necessary data is already compiled when you begin the application process. The fact that the AI ​​collects data from multiple sources to check your current creditworthiness is a big plus.

The result is more reliable credit scores that speed up the process. In some cases, you may be approved for this credit card immediately or may only have to wait a day or two for the mortgage application to be approved.

More effective fraud detection

Online banking is great, but it comes with risks. Hackers are actively trying to break into domestic and international bank accounts. Often the purpose is to make purchases with account balances or transfer funds out of accounts, leaving unsuspecting consumers with nothing.

AI is used in many institutions to identify and prevent fraudulent use. If an attempted transaction indicates that you are at a hotel in a country you have never visited, AI may flag this, suspend the transaction, and take further action to determine if it is you.

In addition to protecting your domestic and offshore accounts from threats you may never know existed, fraud protection is one of the biggest elements of how AI contributes to secure operations. banking.

Improved data security

Speaking of fraud attempts, did you know that AI has taken voice recognition to a whole new level? If there are attempts to use your accounts for transactions over the phone or even in person, this effective tool can compare your voice pattern with the person attempting to complete the transaction.

Think about what it might mean if a bank account is hacked or you unknowingly lose a physical card. With this level of security, you can ensure that nothing is done with your account that you don’t specifically authorize.

Faster and easier access to account management

There are times when you need access to your accounts immediately. AI drives the process. You can use secure login credentials to access these accounts, usually using additional credentials other than your password. The AI ​​speeds up the process, so it doesn’t take long to establish that you really are you.

Consider how it would work if you needed to access the account on a device other than your generally accepted method. AI will note that this is unusual activity and then take steps to ensure that it is you who is trying to access the account. Automated messages sent to you by text, email or voice allow you to confirm your identity. Once done, you can manage your account data as provided.

Stay in compliance with banking regulations

For the bank, AI makes it possible to fully comply with current banking regulations. These regulations are strict, and for good reason. They are also subject to change. Being aware of pending changes allows the bank to adjust the operation and stay compliant.

Thanks to AI, it is easier to be aware of anything that may not be in compliance with current regulations. This can significantly save the bank since compliance can result in substantial fines. Since many of these regulations impact consumer safety, you indirectly benefit from AI’s efforts to keep the bank in compliance.

Your bank is probably using AI behind the scenes in ways you never anticipated. Some of the resources you take for granted when managing domestic and offshore accounts are the reason you can manage transactions so easily.

AI continues to evolve

Technology is constantly evolving, and so is AI. Be on the lookout for further improvements. As AI continues to develop, you can bet financial institutions will be ready to make the most of the latest innovations.

Authors biography :

Luigi Wewege is the president of Caye International Bank, headquartered in Belize, Central America. Outside of banking, he is an instructor at the FinTech School in California, which offers online training courses on the latest technological and innovative developments in the financial services industry and serves on the board of directors of CI Associates, a company offshore wealth management company based in Chile. Luigi is also the published author of
The digital banking revolutionnow in its third edition.

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