The Indian banking industry has evolved rapidly after liberalization when the economy opened itself to private and foreign banks. While tech giants tend to hog the limelight on the cutting-edge of technology, AI in banking and other financial sectors is showing signs of interest and adoption even among the stodgy banking incumbents. However, not all banks have a research and development function to help them leverage this technology. As artificial intelligence helps to provide a more personalized experience for its customers, the up-and-coming technology can also reduce operating costs, Monroe said. Now, you can transfer, withdraw, manage your account, apply for loans, make payments, and create a new account, in just a few clicks. Zirkle also said that while artificial intelligence can detect fraud, it can also be used to prevent it with authentication. Application of Artificial Intelligence in Indian Banking-Opportunities and Challenges Select Research Area Engineering Pharmacy Management Biological Science Other Scientific Research Area Humanities and the Arts Chemistry Physics Medicine Mathemetics Economics Computer Science Home Science Select Subject Select Volume Volume-5 Volume-4 Volume-3 Special Issue Volume-2 Volume-1 Select … “Being able to use artificial intelligence requires that banks find a way to make their data accessible across siloed platforms, and that can be harder for community banks if they use outside vendors to host services.”. Organizing and managing records and customer information, a huge volume of transactional data recording,    becomes easy. Wells Fargo’s future includes artificial intelligence being a part of every aspect of the business and changing the way they work because Monroe believes that “AI is just one component – alongside in-person and contact center support – of providing great customer service.”, Data and analytics are becoming a key competitive advantage in financial services, which makes it critical to organize now, Monroe said. To achieve these goals, they are aggressively implementing AI tools. This massive technological revolution has transformed conventional banking methods to convenience banking methods. The Indian banking industry has evolved rapidly after liberalization when the economy opened itself to private and foreign banks. There is a multitude of applications that a typical AI uses, such as expert systems, speech recognition and machine vision, natural language processing, knowledge assimilation, and more. Amy Zirkle, global payments expert and interim CEO of the Electronic Transaction Association, said technology is transforming the payments industry, especially within the realm of AI. For example, when you’re at checkout and your card declines even though you know you have enough money in your account, this could be a false positive stemming from fraud. This is the only way to create the right impact of the new technology. See how banks are using AI for cost savings and improved service. To conclude the paper, the author presents illustrations of current research directions. “We really shape the industry in respect to things like mitigating instances of fraud, gathering critical, vital data to assess what is really going on,” Zirkle said. For example, needing a thumbprint or facial recognition to use your electronic wallet on your smartphone. This paper is a collaborative effort between Bryan Cave These findings were similar to findings of the secondary research conducted, majority of existing studies also suggests that artificial intelligence application in banking sector is for automating process to reduce manual labor as well as reduce human error and provide personalized services to customers. Every few months, there is a new technological innovation being adopted to make the banking space better. And a typical AI model displays at least some of the following human capabilities: Planning, learning, reasoning, problem-solving, knowledge representation, perception, motion, and manipulation and, to a lesser extent, social intelligence and creativity. Implementation of AI has reduced human effort and decreases the chances of human error in several fields. Apart from promptly assisting the customers with queries, it provides personalized products to individual customers based on their banking history and transactions. According to a report by the National Business Research Institute, more than 32 percent of financial institutions are using artificial intelligence through voice recognition and predictive analysis. Finally, there is no fear of exhaustion. artificial intelligence is creating the most impact in the Indian banking sector. Save my name, email, and website in this browser for the next time I comment. Impact of Banking Sector Development on Economic Growth: Another Look at the Evidence from Nigeria @article{Abubakar2013ImpactOB, title={Impact of Banking Sector Development on Economic Growth: Another Look at the Evidence from Nigeria}, author={A. Abubakar and Ibrahim Musa Gani}, journal={Journal Of Business Management & Social Sciences Research… It has changed the landscape impressively and made banking activities a lot easier to perform. The customer feels like they have the specialized and individualized attention they’re looking for from the bank,” Zirkle said. All Rights Reserved. Experts suggest that that is just a myth. “Fraud can be very, very expensive, so these heightened levels of sophistication in analytics reduces instances of fraud and helps contribute to reductions in some of the costs that are associated with instances of fraud and data breach,” Zirkle said. If you look at our ability to audit, with regards to looking at a bank, for example, then we can look at them much faster. Scope. This massive technological revolution has transformed conventional banking methods to convenience banking methods. Monroe said there is an expectation that organizations will use the increasing amount of data to know their customers, which includes anticipating their needs and offering them something they value, to make their lives easier. A large part of development in the industry can be attributed to the adoption of Artificial Intelligence. Download our free e-book to learn everything you need to know about chatbots for your business. It has great potential for positive impact if companies deploy it with sufficient diligence, prudence, and care. The scope of this report is limited to our research findings as of May 10th 2018. Corpus ID: 17932064. At this time in the history of banking in India, the adoption of technology started, and the results are quite evident. Artificial Intelligence in Finance provides a platform to discuss the significant impact that financial data science innovations, such as big data analytics, artificial intelligence and blockchains have on financial processes and services, leading to data driven, technologically enabled financial innovations (fintechs, in short). Sentiment analysis is a capability of NLP which involves the determining whether a segment of open-ended natural language text (which can be transcribed from audio) is positive, negative, or neutral towards the topic being discussed. With the tools and assimilated knowledge, a greater level of risk analysis is possible, which can help banks create tailored products based on the customer’s history. Here are some points to consider. The banking industry is yet to realize the full potential of AI in banking, therefore, researchers are making dedicated efforts to explore new opportunities. “(Smaller banks) can look toward opportunities for collaboration with similarly situated entities who share a common interest and goal in advancing AI use,” Zirkle said. Virtual assistants in your smartphones are one of the classic examples of, began in the early days when merchants roamed around the world trading their goods for the grains from the farmers. All in all, AI has created a massive shift in the banking space. There is a better scope of achieving regulations compliance and standardization. In less than five years, several banks have adopted robotics and related AI tools to ease their business, bring more efficiency, and ultimately optimize profits and achieve their business goals. Artificial Intelligence is the future of banking as it brings the power of advanced data analytics to combat fraudulent transactions and improve compliance. Impact of Artificial Intelligence in Banking Sector AI has enabled the banking industry to expand their gamut of products and services and improve its efficiency in many ways. AI technologies will clearly have a huge impact on the financial services sector. Additionally, the paper discusses a reported shortcoming of the basic algorithm, besides comparing the two methods of overcoming it. AI algorithm accomplishes anti-money laundering activities in few seconds, which otherwise take hours and days. INTRODUCTION Next generation digital technologies like machine learning (ML) and artificial intelligence (AI) are creating a … Artificial intelligence, or AI, is technology that makes it possible for machines to learn from experience and to perform tasks that would typically require human intelligence. Nonetheless, most of these changes are aimed at making customer experience and services better and more enriching. If we compare it to the time when visiting a bank was the only way to withdraw money, to the modern banking era where one click on a mobile banking app is all you need to do is to make a payment, we know that the banking industry has come a very long way in a few years. See how banks are using AI for cost savings and improved service. Rapid implementation of AI technologies is, therefore, central to fighting persistently weak profitability and to remaining competitive. Introduction The digital banking and finance sector in India, especially retail banking, benefited from the November 2016 decision by the Government of India to discontinue the use of Rs. With applications like natural language processing and voice recognition, AI tools are interacting with humans and assisting them in solving problems efficiently and promptly. Just the implementation of sophisticated technology is not going to benefit until changes are made to create a cultural shift without disturbing the existing structures. Various software and virtual assistants fast-tracked the tediously lengthy task of digitization. Artificial Intelligence (AI) is the software at the centre of the Fourth Industrial Revolution. But the question remains at what speed will these advances be implemented and how will customers embrace them.”. In the past few decades, there have been a few ups and downs, but it was only in the 2000s that the world woke up to its glory. The IHS Markit’s “Artificial intelligence in Banking” report claims that this cost has grown up to $41.1 billion in 2018, and is expected to reach $300 billion by 2030. In this article we set out to study the AI applications of top b… Meanwhile, the workforce, with enriching knowledge of data science skills, must be created to fulfill work opportunities. The applications of AI in banking are a $450B opportunity for the banks that take advantage of the digital transformation. It is important for banks to create a secure financial environment. A recent research study shows that artificial intelligence is going to help financial institutions save $1 trillion in project cost savings. Largely, these machines are developed to mimic human cognitive abilities such as learning, analyzing, problem-solving, calculating, decision making, and reasoning. Our approach seeks to quantify the total economic impact of artificial intelligence on the economies of 7 countries in the Middle East (Egypt, UAE, Saudi Arabia, and four countries have been grouped: Bahrain, Kuwait, Oman and Qatar) via productivity gains and consumption side impacts … Additionally, the paper discusses a reported shortcoming of the basic algorithm, besides comparing the two methods of overcoming it.  The banking industry is one of the first industries to adopt artificial intelligence and it is expected to change its future. How artificial intelligence will impact accounting Artificial intelligence is no longer the stuff of science fiction and Hollywood movies. “It will be interesting to see how the future of AI continues to fuel the innovation that is reshaping financial products and services within the established banking companies in Arizona. It is important to bring a mindset change to create trust and maximize its potential. Artificial intelligence predictive analytics cut down on those decline rates. What Are Some of the Best Fintech Companies of This Year? It is easy to detect fraud and prevent any kind of disastrous activity. Corporate R&D spending reached 5.5 billion euros in 2017 ( Startup Genome, Frankfurt Startup Ecosystem Report, 2018 , p. 16). When it comes to India, evidence of banking activities such as loaning was found in the Vedic Period. Everything from business operations, customer service, and marketing, to risk management and compliance is starting to benefit from the applications of AI. AI technologies are making banking processes faster, money transfers safer and back-end operations more efficient. If you look at our ability to audit, with regards to looking at a bank, for example, then we can look at them much faster. It is expected to create new job opportunities in the millions. 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