Benefits of implementation of AI in financial institutions

Artificial intelligence is a key element of the banking and financial institutions, serving to deliver
affordable and trustworthy banking and financial services. It is being used in the banking and financial
industry to improve customer relationship management. Some of the benefits of implementation of AI in
banking sector and financial institutions are discussed below:

 Reduction in operational cost and risk: It allows banks and other financial institutions to manage
huge data to receive valuable insights. By using AI systems, it helps reduce cost by increasing
productivity and reduce cost of error. It also reduces the risk of errors and improves the accuracy of
the data processing through automation.
 Upgraded customer experience: AI in financial industry gives the ability to manage huge amounts
data at high speed to get sharp knowledge and better understand their customer or clients’ behaviors.
Bracing customer base by increasing contentment and trust, it enhances service responses. AI-based
chat-bots and virtual assistances can provide customers with customized and automated services
including answering questions, providing financial guidance, and even making transactions. This
increases the customer or clients’ experience by providing fast, efficient and customized services that
are available 24/7.
 Enhanced security: AI-based system enhances security through fraud detection and prevention. AI
algorithms can inspect huge amounts of customer data in real time to identify possible fraudulent
activity. It identifies abnormal spending patterns or suspicious transactions. It helps to prevent
fraudulent activities before it occurs. Thus, it enhances security and protects both customers and
institutions.
 Improved loan and credit decision: It improves customer service experience through the use of
virtual assistants or credit scoring to correctly determine a borrower’s risk. By using AI systems, it
helps to make more knowledgeable, safer and successful credit decisions. AI-based algorithms can
look at behaviors and patterns to determine customer credit history and likelihood of default.
 Better investment process: By using AI in organizations’ structure, helps to make good investment
decisions and support their investment activities. Many banks and financial institutions are offering
robo-advisers to help customers with portfolio management. Through customization, chat-bots and
customer-specific models, these robo-advisers can provide high-quality guidance on investment
decisions and provide better assistance.
 Quality decision making: It allows better decision making through data analysis and insights. AI
algorithms can inspect huge amounts of data and provide precious insights to financial institutions
including customer behavior patterns, market trends and risk analysis. This helps institutions to make
better decisions and develop more effective and efficient strategies to meet the changing needs of
both customers and the industry.