Artificial intelligence (AI) being introduced into the banking world is a hot topic right now. Quite a few of the world’s largest financial institutions are now beginning to implement AI into the businesses.
The reason why so many have been reluctant until now is that banking is extremely vulnerable to disruption by AI.
Still, according to a survey released by Narrative Science and the National Business Research Institute, only around a third of financial institutions have adopted to using AI.
One of the reasons for this is due to a lack of AI talent among banks. To get around that more than $82 million has been invested in the development of AI applications for financial institutions, almost of which came from Wells Fargo, Capital One, and JPMorgan Chase.
In order to start integrating AI into these financial institutions, they should start with their back-end applications first. These typically involve less risk of disruption than front-end AI service applications such as chatbots that are still very much in the early development stage.
Different banking institutions will have different areas that that AI can help improve. Take the Bank of America Merrill Lynch, for example. It’s currently in a partnership with HighRadius and together they’re looking to use AI to help automate receivables. HSBC, on the other hand, is looking to use machine learning to improve money-laundering detection techniques.
Other ways that AI can help banks is through more accurately assessing potential credit customers, helping businesses to automate fraud detection and expense reporting, and through developing more accurate investment models. But, identifying the need is the easy part; implementing it is a whole different story.
AI systems are only as good as the data they were trained on. Banks have a huge amount of data, but it’s not always easy to gain access to it.
Both paper and digital banking data are still stored on legacy systems that are often very hard to get into and extract the information you need. Because of this, many banking institutions are now happily turning to cloud-based solutions and system upgrades in which to make their lives so much easier.
Those banking firms that start to implement AI now will have a much easier time later on. Data will become more accessible, and easier to analyze and banks can finally start to give customers what they really want.
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