Artificial intelligence (AI) has been gaining media attention and generating a lot of conversations on the internet. OpenAI’s ChatGPT has reached 100 million monthly users at a faster rate of adoption than Instagram or TikTok (Time.com, 2023).
AI has the potential to revolutionize the banking and fintech industry. Over the past few years, it has already transformed the banking and financial industry. One of the key benefits of AI in banking is the ability to process big amounts of data quickly and accurately. This allows banks to make data-driven decisions and offer more personalized services to their customers.
According to PwC, AI is expected to generate $1.2 trillion in value for the financial industry by 2030 (PwC, 2017). The potential of AI in banking and fintech is significant. As technology continues to develop, the banking and fintech sector should expect to see more opportunities and growth.
Here are 5 Areas where AI is already making an impact
1. Better Customer Service
Nowadays, most fintech companies have AI-powered chatbots to provide 24/7 customer service, allowing customers to reach help and support at any time and anywhere. AI is opening doors to convenience, better financial management experience and customer-centricity.
According to a recent study, chatbots are expected to save banks 862 million labor hours, and that will be up to $7.3 billion globally (juniperresearch, 2019).
2. Enhanced Security
With online banking becoming more common and widely adopted, most bank frauds happen online. Fortunately, AI-based systems can quickly detect suspicious behavior, identify patterns and verify a user’s identity, allowing banks to prevent fraud more effectively and quickly, thus keeping financial data and money under enhanced protection.
According to a study by Accenture, AI-powered fraud detection systems can detect fraudulent activity with 95% accuracy, compared to 60-70% for traditional methods.
AI’s ability to analyze and process mass amounts of customer data allows fintech companies and banks to offer customized services and products tailored to individual customers, such as personalized investment recommendations, targeted marketing campaigns or foresee client demands. Nowadays, customers expect fintech providers to cater to their requirements and recommend products and services that are relevant, just like any other shop. This can lead to increased customer satisfaction, loyalty and trust.
4. Cost Reduction
Adoption of AI-based technologies can help businesses reduce operating costs and eliminate vast amounts of manual and repetitive work. This can help the fintech and banking sector to save billions of dollars in resources, labour costs and capital.
Voice-activated AI technology in the financial service industry provides more efficient customer service. It can also handle payments, card activations, password resets and payment reminders. Voice assistants can free up customer support employees to take on more complex and valuable tasks.
AI is without a doubt going to significantly impact the financial industry. It presents many opportunities for growth and valuable advantages such as improved customer experience and cost reduction. As the financial market is highly competitive, implementing AI is essential, as staying away from technological advancement can cost more in the long run. How do you think AI will change the world of banking and fintech?