AI Can Save Banks $447 Billion by 2023
Since the banking industry is usually at the forefront of adopting new technology, we should not be surprised that more and more banks are incorporating AI into their service offering. In fact, AI can save banks $447 billion by 2023. Front and middle office savings alone account for $416 billion. Research by OpenText shows that 80% of banks realize the substantial savings they could be enjoying and are already implementing AI solutions to improve the customer experience. Let’s take a closer look at all of the benefits AI can offer the banking sector to understand how it saves the banks so much money.
AI in the Front Office
Whenever you walk into a brick and mortar banking location, it is fairly commonplace to see a few bank tellers with many vacant windows. The reason for this is that a lot of these jobs have been automated. We already have technology like remote check deposit via a banking app which eliminates having to make a trip to the bank. The latest developments we are seeing are in conversational banking. Banks are now using chatbots to interact with customers so they don’t even have to call customer service, let alone actually walk into the bank. Companies like Finn.ia have created chatbots or virtual financial advisors that can understand what the customer is saying as well as the context. Banks and many other businesses have been using AI-powered chatbots for customer support purposes, but now we are seeing AI used on a more personal level.
Such chatbots are powered by speech recognition technology which requires human data annotators to label important words and phrases the machine must recognize. This includes methods such as semantic annotation that involves identifying things like names or objects within the text files which will be used as references for the machine to learn from. Entity annotation would need to be done as well which labels unstructured sentences and makes all of the information readable for the computers. Actually, even the older technology that is used to remotely deposit the check also requires text annotation since the algorithms need to identify all of the numbers and writings on the check.
Using AI for Fraud Detection and Prevention
Banks are relying on AI technology to monitor potential cases of fraud and prevent them from happening. This can be more challenging for banks that have no physical branches and conduct all transactions completely online. An interesting example of fraud monitoring and prevention is what USAA is currently doing. USAA is a Fortune 500 company based in Texas and they have no brick and mortar branches. They are relying heavily on AI technology to monitor how their customers are using their banking app as well as the location and the usual actions a customer performs while using the app and try to detect anomalies which could be a sign of fraud. According to USAA, such technology saves their customer around $100 million every year. USAA is also using chatbots mentioned above and is also using AI to monitor the conversational patterns of customers to detect suspicious or unusual requests.
AI in the Back Office
AI is used by banks to perform back office tasks such as underwriting. Whenever a customer requests a load or a mortgage, the bank needs to perform a lot of research and collect information to properly assess the risk of default or losing money on the loan. The machines can collect the necessary information a lot faster than humans, combine all of this information into a complete picture, and extract deeper insights from the data to make a more accurate decision. Right now, AI is being used to assess a person’s creditworthiness, especially for people who have no credit history and it also improves the customer experience. We have to keep in mind that all of these processes are interconnected. The faster you can collect the needed information, the quicker you can streamline internal processes which leads to better customer experience.
Mindy Support is Facilitating the Development of AI Banking Technology
As we have seen from some of the examples above, the latest AI technology requires a lot of data annotation to train the machines to perform the necessary functions. Mindy Support is taking such time-consuming tasks off the shoulders of researchers allowing them to focus solely on developing their product. We are one of the largest BPO providers in Eastern Europe with more than 2,000 employees across six locations in Ukraine. Regardless of the size of your project, we can source and recruit the necessary amount of candidates quickly and scale your team without sacrificing the quality.
November 13th, 2020 Mindy News Blog
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