” You may not realize it, but artificial intelligence is all around us .”
– Judy Woodruff, American writer and journalist.
In the early period of 21st century, no one could have even imagined of an account opening or credit offtake in one`s fist, with the help of pocket size instrument i.e. smart phones. Customers were fully dependent on branch visit and staff intervention for these basic banking facilities but Artificial Intelligence, with different applications, has made all differences now. Account opening, fund transfer, loan offers and credit offtake etc. are available on fingertips within no time. AI has rechristened the form of Customer Service, Customer Relationship Management, Digital Banking, Fraud Prevention, Risk Management, Credit Decision and Cross-Selling etc.
According to John McCarthy, American Scientist and Father of AI, “Artificial Intelligence is the science and engineering of making intelligent machines, especially intelligent computer programmes.” It is the study of how to make machines intelligent and fast enough to solve problems and accomplish targets even in the complex situations. AI involves the ability of machines to surpass the capacity of human reasoning and decision making. It makes machine mostly simple but reasonably smart. Robot is the best examples of it. Opening of smart phones with the help of fingerprint or face ID, friends’ suggestions on Facebook, video recommendation and suggestions on YouTube, spam filtration of email messages, Uber or Ola for travel and navigation and suggestions available on different search pages e.g. Google etc. are best example of AI in our daily use.AI is about to make world a better place to live in and the whole world has been making all sincere efforts to leverage its usage.
GPAI and RAISE 2020:
India, USA, Australia, Canada, France, Germany, England, New Zealand, and other countries assembled in the month of June this year, to create the Global Partnership on Artificial Intelligence- GPAI. Our government also honoured the versatility of AI and recently organised a virtual global meet “RAISE 2020- Responsible AI for Social Empowerment 2020” to exchange ideas towards responsible use of AI in the vital areas of Education, Agriculture, Healthcare, Governance, Financial Services and Social empowerment etc. Such events boost AI initiatives, and it has already played an important role for banking and finance in the form of multiple innovative products.
Artificial Intelligence in Banking and Finance:
Artificial Intelligence is not new for Indian Banking System. SBI organised a hackathon, few years back, named “Code for Bank” to encourage developers to build solutions, leveraging technologies such as Blockchain and Artificial Intelligence into the banking sector. ICICI bank introduced RPA- Robotic Process Automation in 2016. HDFC bank has launched IRA 2.0, the advance version of its interactive humanoid. Bank of Baroda introduced AI with a robot named `Baroda Brainy`. Canara Bank installed robots named Mitra and Candi at some of its offices. Though, AI adoption is still in its nascent stages, research says that the adoption of AI has the potential to add nearly $1 trillion to the Indian economy by 2035.
Banks have leveraged the use of AI for seamless and 24×7 banking on three major banking channels- Interactive Banking (front office), Fraud detection and Risk Management (middle office), and underwriting and Credit offtake (Back office). SBI deploys SIA (SBI Intelligent Assistant), a chatbot. HDFC bank introduced EVA (Electronic Virtual Assistant) and iPAL has been launched by ICICI bank. These assistants help to answer customer enquiries and information about products and services instantly. It redefines customers` banking experiences. AI algorithm anticipates customer’s needs and accordingly offers personalized services to individuals. Fraud Prevention and Risk management are possible with regular watch on expenditure pattern to identify odd and irregular transactions with the help of AI only. Data analysis may provide deeper insight into customer data to formulate business strategy whereas intelligent automation facilitates backend processes. AI and machine learning examine banking transactions to understand earning and expenditure patterns for loan offerings and credit decisions.
SBI, the largest bank of India, also leveraged the use of Artificial Intelligence and Machine Learning with its app “YONO- You only need one.” Digital Banking, Financial Superstore and Online Marketplace are major base to explore YONO with tagline “Lifestyle and Banking Dono.” Digital account opening, fund transfer, cheque book request, loan offers and most of the other banking facilities are available on YONO platform. Bank offers loan and compatible variants of insurance policies, mutual fund, credit card etc. online to the eligible customers with the help of AI only. Under online marketplace, YONO offers additional discounts in collaboration with other players to market third party products. More than 100 companies including Amazon, Flipkart, Myntra, IRCTC etc. are global partners of YONO under menu Shop & Order. All these available facilities helped YONO to consolidate its position as a strong option of multiple apps during this pandemic under SBI`s campaign `Ghar Se Banking. `
AI has made life easy for all, but many challenges are still there. Advantages motivate to explore and harness more whereas challenges give an insight to rethink and realign the process to transform towards positive returns.
Advantages of Artificial Intelligence:
Mastering AI may make us leader in terms of competition. Speedy and accurate technology will attract more consumers towards the banks, adopting more AI. Cost, a big concern for banking and finance majors may also be addressed with the use of AI. Multi-dimensional and manifold performance of AI can significantly reduce the cost of banking services. AI always remains alert towards Risk Management and Fraud Prevention. Image or face recognition, with the help of real-time camera images and advanced AI technique – deep learning, can be used at ATMs to detect and prevent frauds and crimes
AI systems’ assistance in analyzing huge chunks of data, performing calculation and prediction capabilities can aid in developing strategies for better returns through proper credit offtake. Wealth management and personalized portfolios can be managed with help of AI for clients by taking into account-lifestyle, risk appetite, expected returns on investment etc.
Challenges before Artificial Intelligence:
Customers prefer emotional connect where AI, a form of technology can respond but not with expected feelings. It may disconnect customers against product and organization. Data is raw materials for AI and data quality and proper processing are major challenges before experts. Biased attitudes towards AI algorithms may jeopardize both banking companies and their customers. AI may increase cyber security issues also. Cyber-attacks could be customized, making them more effective through personalized phishing, using chat-bots or voice mimic technologies to extract confidential information. It also lacks the ability to take decisions under special and complicated circumstances.
The biggest challenge before industries is lack of people with right data science skills. Existing workforce lacks expertise in latest tools and applications. Mass adoption of AI may also cause a grave problem of unemployment in all the sectors.
Conclusion:
According to Forbes, AI start-ups has been magnified 14 times, since 2000.AI has been implemented by 37% of organisations, and in foreseeable future 85% of business associations with banks will be managed by consumers through Chatbots only, as per leading research and advisory company Gartner`s study.
Research and Development reaffirms that despite all odds, Artificial Intelligence is necessity of not only banking and finance but of human life. People prefer experiences rather than services alone and AI glorifies it in every walks of human life. Removal of monotonous and repetitive tasks from day to day work may also be ensured with the help of AI. It will bring new opportunities in the form of new jobs and new sets of skills for the workforce .Mukesh Ambani, Chairman of RIL, praised AI as a valuable tool to achieve $5 trillion economy at a faster pace, during RAISE 2020. It will also be helpful for the country to become ‘Atmanirbhar.’ All innovations and developments simply establish Artificial Intelligence as a big leap to future.
Malay Kumar
Chief Manager
SBILD, Varanasi.
