Digital transformation using AI is the transformative era for the Banking, Financial Services, and Insurance (BFSI) sector.
Artificial Intelligence has become a hot topic in boardroom discussions for strategy building. AI in Digital transformation is not just an innovation but a disruption that has redefined how financial institutions operate, interact with customers, and manage their resources. If you look at the use cases nowadays, AI is not just a tool but a strategic imperative enabling organizations to stay competitive.
AI enhances fraud prevention by swiftly identifying and flagging potential fraudulent activities as they occur.
Leveraging AI for data analysis in finance and fraud detection
There is a massive amount of data generated by financial institutions through their internal process and customer interactions. AI can use this vast data. There are multiple cases where this is used currently.
AI is used for fraud detection, which helps prevent scams by identifying potentially fraudulent activities in real-time. The software evaluates the pattern of the regular transaction using a Debit/Credit card or UPI of the person on timings, usage, and payment to vendors. It uses this data to identify any unusual pattern compared to the previous one. Any unusual pattern generates the added confirmation sent to the person for verifying the transaction even before it happens. Also, these patterns can be fed manually and evaluated by AI logic.
Robo Advisory and Predictive Analytics
Robo Advisory and Predictive Analytics for Investments can be done using AI. During my recent discussion with the Senior leadership of an Indian bank, this was the major ask by them on Robo Advisory to be part of their wealth management platform for their customers. It analyses market data, news, and economic indicators to predict stock prices, asset allocation, and investment strategies. This can be beneficial for both individual and institutional investors. The Robo Advisory feature is a significant known ask by the BFSI industry to their WMS software provider in the market.
Sentiment analysis for investment decisions
Sentiment analysis is another used case of AI. AI can analyze social media, news, and other external data sources to gauge public sentiment and market trends, helping in investment decisions.
Enhancing call center quality with AI
The quality evaluation of the bank call center can be done through sentiment analysis of the customer care call center calls. From my earlier experience, real-time evaluation of a bank’s customer care calls can be done by evaluating the verbiage used by the customer. It can give you data to showcase if the Agent could make the call from negative to positive. Now, you do not need manual random listening of calls to do quality checks for the customer care center. You can use AI to suggest Agents live on how to handle the situation with customers on call.
Customer service automation for enhanced security
Nowadays, Chatbots used for handling customer queries are AI-enabled, which helps to get the queries answered at the first level at the Chatbot level instead of manual intervention.
Voice and Speech recognition is another used case for customer identity and verification to enhance user experience in call centers and mobile apps. To make the interaction more secure, it should not just be data shared by the caller to verify but to check the caller’s identity.
The future of AI in the BFSI sector
The world of banking and financial institutions is evolving, and India is leading it from the top and showing the way of digitalization. Integration of Artificial Intelligence in the BFSI sector represents a pivotal moment in the industry’s evolution. AI has brought efficiency and automation and redefined how financial institutions interact with customers, manage risks, and stay compliant with evolving regulations. As we look to the future, the continued advancement of AI in BFSI promises to enhance the customer experience further, improve decision-making, and fortify security measures. The synergy between AI and BFSI is not just a trend but a transformational journey that will shape the financial landscape for years to come. This journey is marked by innovation, adaptability, and an unwavering commitment to meeting the evolving needs of customers and the industry.