Artificial Intelligence is the Future of Finance
Artificial Intelligence is everywhere these days and has become an indispensable tool for all types of businesses. In personal finance, AI is especially useful to banks in making their customers’ lives easier. From chatbots to fraud protection, AI provides customers with the independence to access their accounts at any time of day or night, and is, therefore, an essential service for banks to have in order to be competitive in today’s marketplace. Here are 5 ways financial institutions can add value through AI:
1. Preventing Cyberattacks
Safety is a top concern among financial clients, especially now that online banking has become so widely used and accepted. Consumers generally look for banks that can provide them with secure accounts to protect them from fraud, which is a growing threat that costs companies billions of dollars each year. In fact, Insider Intelligence reports that online payment fraud losses are expected to jump to $48 billion per year by 2023, so it’s more important than ever for banks to invest in AI which can detect account irregularities in ways that humans cannot. Eno is one example of an AI application that was developed and launched by Capital One in 2017.
2. Making Smarter Underwriting Decisions
AI can also be used to predict and evaluate loan and credit risks to assess a wide variety of borrowers, including Millennials. This is an important tool, as Millennials make up a large portion of banking customers and are often in need of financial assistance.
3. Improving Customer Service
AI can help customer service representatives improve their performance to ensure customers get better and faster service. AI can send notifications, deliver security codes and block and close accounts. Automating these tasks allows bank employees to focus on servicing their clients rather than executing time-consuming tasks, thereby providing hassle-free, 24/7 customer interactions without unnecessary or repetitive work. AI also reduces the chances of human error, which ultimately enhances customer service performance.
4. Automating Tasks
Fraud protection is just one of the many automated tasks that AI offers. AI also helps banks automate a variety of processes, such as reconciling invoices and purchase orders, retrieving data from bills, automating ingoing and outgoing payments, and investigating payments. Automating middle-office tasks with AI will potentially save North American banks $70 million by 2025 and overall AI implementation is estimated to provide banks with $447 billion in comprehensive savings by 2023.
5. Lowering Bills
Saving money is at the top of people’s minds and banks that can help with this will score big points from their customers. One of the best and easiest ways to save money is through bill reduction. However, negotiating bills takes time and patience, two things customers have very little of these days. Partnering with ApexEdge allows banks to offer bill negotiation seamlessly and doesn’t require any work on the customers’ part. ApexEdge handles all of the negotiation behind the scenes and provides automatic enrollment and status updates through its sophisticated AI system that the banks can adopt as their own. Banks can then use these systems to update their consumers on the bill negotiating progress and notify them once the desired savings have been achieved. They can even use them to identify future savings. This is a great example of how AI can add value, as consumers will be happy that the challenge of trying to lower their bills themselves is eliminated.
AI is clearly the wave of the future. Millennials and Generation Z, which comprise the largest consumer groups in the US, mainly prefer digital banking platforms over having to go into a branch office, even more so now in the pandemic era. By 2024, Insider Intelligence estimates that almost 73% of US consumers will adopt online banking and 58% will adopt mobile banking. Therefore, it is more important than ever that banks meet this demand through their commitment to investing in Artificial Intelligence.
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