Artificial Intelligence, or AI, came into existence in 1956 and has entered every industry to revolutionise it. AI probably affected Asia’s banking sector more than any other industry. The Asian Banking & Finance site shares that 80% of Asian banks currently use Gen AI. With the rise of AI in banking, everybody is experiencing ease in operations, whether it’s investment management or a process to detect fraud activities. But nobody knows what the future use of artificial intelligence in banking holds. Here, we are discussing how AI and banking together shape the future of finance services in Asia.
Why is AI Crucial for Modern Banking?
The following points will help you understand how using AI in banking is transforming financial services across the region.
Superior Cybersecurity
Cyber attackers have developed over time and have invented advanced methods for attacking financial institutions and their customers. They use phishing emails that look legitimate or imitate customers to confuse banking agents. Banks use artificial intelligence applications and algorithms to establish robust security and thwart financial crimes like money laundering. AI algorithms detect unusual patterns and suspicious activities to detect fraud.
Enhanced API
APIs are heavily used in banking and allow customers to keep track of their money on various applications. AI improves API usage with its security measures and automates repetitive tasks. Ultimately, people enjoy a better user experience with tight security.
Better Customer Services
The rise of AI in banking has enabled the use of advanced tools to streamline customer services. AI chatbots and virtual assistants help customers to solve small problems on their own. For instance, you must have seen chat windows asking for help whenever visiting a banking site. AI also powers budgeting apps that allow customers to manage finances and save more money better than ever.
New Market and Opportunities
The use of AI in banks has allowed Asian financial institutions to learn about their customers, such as their habits related to finance. Artificial intelligence applications and algorithms allow analysis and comparing data points to predict customers’ intentions. AI analytics can also detect new areas of growth.
Smarter Credit Scoring
Every day, several customers apply for credit cards. Before accepting an application, banks must determine a customer’s creditworthiness. Using AI in banking has helped Asian finance institutes to determine one’s creditworthiness, assess requests rapidly and approve or deny applications.
How Banks Should Approach AI?
While using artificial intelligence in banking has transformed the Asian finance industry and is still transforming, learning the right approach is vital. Here are a few points Asian finance services must note when combining AI and banking.
Define Risks and AI Governance
AI also has some risks along with benefits, like being used for fraud. The Asian finance institutes should point out these risks and ensure proper governance accordingly to counteract them with maximum efficiency.
Prioritise Use Cases
The use of AI in banking should be limited to specific cases, such as customers interacting with chatbots, fraud prevention, and creditworthiness assessment. Excessively using AI for financial services can have reverse effects.
Selected a Trusted AI Platform
AI platforms can be open-source or built-in. Enterprises generally use a combination of both platforms. Financial institutes should also use both or one platform, according to their approach.
Embrace A Hybrid Cloud Architecture
Using a hybrid cloud architecture, banks can switch between public and private clouds to promote resilience and responsiveness for digital banking in real-time.
Banking and AI Collision
At the current time, Asian banks are under tremendous pressure from customers. They are continuously prioritising automation for quick customer service. However, customers want interactions to be personalised and human. In the future, the use of AI in banking will change the industry even more. Banks will achieve continuous profitability with smart automation.
