In this blog post by Compare Banks, we cover AI/ML in banking.
The Role of AI and Machine Learning in Banking
Role of AI and ML in banking: UK 2023 — FAQs
How are banks using ML and AI to satisfy consumer needs?
Customers’ expectations that their financial institutions implement AI and ML are a major force pushing for its widespread use. Banks depend on customer loyalty, therefore they need to provide customers with a new method to bank that is safe, convenient, and meets their individual needs. Financial institutions are working around challenges including legacy systems, high costs, and a lack of skilled workers in order to provide customers with a more technologically advanced product or service. The first companies to implement this technology will have a distinct advantage over their rivals.
As an industry, does banking have no choice but to accept the AI/ML future?
There is a valid reason why financial institutions are competing to be the first to use AI. The banking sector has been trying to shift its focus from employees to customers for quite some time. Because of this change, financial institutions are now adopting a more all-encompassing strategy to fulfil their clients’ needs.
Banks must now consider how to better serve their customers as they shift their attention to them. Customers now anticipate that their bank will be accessible whenever they need it, day or night, seven days a week, and that this support will be provided on a massive scale. Banks can do this with the help of AI.
Banks will need to overcome internal issues including outdated technology, data silos, poor asset quality, and restricted resources before they can meet these customers’ expectations. Because of these and other obstacles, financial institutions have been slow to adapt to changing client needs. Realising that artificial intelligence (AI) may help them do so, many have turned to it.
Use of AI in banking: what are examples?
AI and ML technologies are already being used by a select group of large financial institutions to boost service standards, identify fraudulent activity and cybersecurity risks, and enrich the customer experience. Some actual financial firms that have been making good use of AI/ML are shown below.
#1 An early warning system for malware, trojans, and phishing attempts has been created by researchers at JPMorgan Chase utilising artificial intelligence and deep learning methods. According to studies, it takes trojans around 101 days to fully infiltrate a company’s network. The early warning system would provide plenty of notice before the assault occurs.
It may also notify the bank’s security staff when a hacker is about to transmit a virus to an employee’s inbox.
#2 Eno, the intelligent virtual assistant from Capital One, is the finest use of artificial intelligence in consumer banking. Virtual card numbers are being used by both Capital One and Eno to combat credit card fraud. Computational creativity is an area of study that aims to teach computers to think creatively in ways that can be explained.
#3 Investment banks like Goldman Sachs and Merrill Lynch, in addition to commercial banks, have begun using analytical AI-based technologies. Alphasense is an AI-based search engine that many banks have begun using because of its ability to employ natural language processing to uncover market patterns and analyse keyword searches.
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