Banks and financial institutions are the initial institutions to realize the benefits of AI in assisting them to understand and estimate the demands of customers, also making significant cost savings. These institutions utilize AI for gathering and interpreting data, analyzing it, and learning from it to enhance their decision making.
For instance, the Royal Bank of Scotland makes use of an AI interface Luvo to assist them in attending to customer queries through an improved and faster medium. Luvo knows the customer’s queries and searches through its spacious storage of answers, to offer an acceptable solution to the customer within a short time.
Which Indian banks are using AI and Blockchain?
Based on joint research on the research made by the National Business Research Institute and Narrative Science, about 32% of the financial service providers that are currently using AI technologies like predictive analytics, voice recognition. Out of several Indian banks, there are only 12 banks that have gotten constant media attention for their AI initiatives over the last few years. They include:
State Bank Of India (SBI)
SBI is making use of an AI-based solution created by Chapdex, the winner of the first national hackathon, “Code for the bank.” It uses SIA chatbot on the front desk, which is an AI-powered chat assistant built by Payjo, a startup based in Silicon Valley and Bengaluru. It’s in charge of customer inquiries and assists them with daily banking tasks acting like a bank representative.
Bank of Baroda
BoB has developed a hi-tech digital branch furnished with enhanced gadgets such as an artificial intelligence robot called Baroda Brainy and Digital Lab with free Wi-Fi services.
Based on a media statement, the Allahabad bank stated that their app’ emPower’ is planned to get significant improvements such as Chatbot and artificial intelligence-based e-commerce payments.
Bengaluru-based AI process, Floatbot has released AI Chatbot combined with main Banking Servers of Andhra Bank, to interact and automate customer support digitally for its 5 Cr customers. Floatbot will also create a chatbot for about 20K+ internal employees of Andhra Bank to automate onboarding and training.
They collaborated with Gupshup, a bot platform, to release ‘YES mPower.’ It’s a banking chatbot for its loan product. While the YES robot is built to answer consumer’s banking related queries anytime, anywhere, reducing the stress of waiting for on-call or searching online. The YES TAG enables customers to do banking transactions on different social messengers.
It has an AI-based chatbot, “Eva.” Eva helps to process knowledge from lots of sources and offer simple answers in less than 0.4 seconds. In the future, Eva will also be able to manage real banking transactions.
The software robots at ICICI Bank are designed to control and interpret information from systems, identify patterns, and run business processes over various applications to perform activities. ICICI has an AI-based chatbot named iPal, which assists in replying queries, assisting in financial transactions, and finding new features.
They released an AI-enabled app that uses natural language processing to allow conversational banking that helps consumers with financial and nonfinancial transactions, queries, and product information.
They released Mitra, a humanoid robot built by Bengaluru-based Invento Robotics, which assists customers in navigating the bank. Also, Candi, which is quite smaller than Mitra, is helping human resources.
Punjab National Bank
They announced their plan to use AI in account reconciliation and also using analytics to enhance its audit systems in 2018. The plan was implemented after the infamous debilitating fraud of about INR 20K Cr, done by Nirav Modi and Mehul Choksi in February 2018, which almost rendered the bank’s operation motionless for a while.
It released Alexa Skill, ‘IndusAssist,’ using which bank account holders can carry out financial and nonfinancial banking transactions with Alexa.
City Union Bank
They released the banking robot, Lakshmi. That can relate to customers on more than 125 subjects. Other than answering generic questions, the robot is also configured to connect with the significant banking solution.
How India is approaching AI and blockchain technologies
India has been fast in primarily incorporating Blockchain technology. Blockchain provides specific possibilities for addressing problems relating to enhancing governance.
Based on Niti Aayog, AI plays a significant role in India’s sectors, such as Healthcare, Agriculture, Education, Smart Cities & Smart Mobility and financial services. Although, there are lots of challenges in incorporating AI, due to the inadequacy of allowing data ecosystems, insufficient availability of workforce trained in AI and the inability to change research into functional market applications.
Alok Mittal, CEO of Indifi Technologies, stated that AI in the future is going to act as the main distinguishing feature for the fintech sector by providing significant support in credit risk predictions, pattern recognition, and fraud identification.
Challenges faced by the Banking sector
Lots of financial institutions have adopted digital technologies, but there are still some challenges to overcome in this industry as we ahead.
Some of these challenges include –
Evolving Customer Engagement: The main challenge is how to fulfill customer expectations and improve customers’ engagement. Diverse demographics have several engagement requirements. Some prefer meeting face to face, while others want to operate virtually. So, financial institutions are continually transforming and evolving their engagement models.
Rising Threats from Nonfinancial Institutions: Nonfinancial institutions are nothing but a threat to traditional financial companies. With companies like Facebook, Amazon, etc. taking advantage of their large consumer base to create financial opportunities, banking and financial institutions are struggling to compete.
Regulatory Pressures: Regulatory requirements are increasing, and financial institutions need to spend an essential portion of their budgets and time assuring compliance with valid regulations. Institutions must keep investing in developing systems and processes which will assist them to be in line with the needs of the transforming world and fulfilling the requirements demanded by these regulations and compliances.
What is the future of AI and Blockchain?
AI will offer the basis for enhanced product and service innovation. Also, artificial intelligence can change customer experiences and develop new business models in banking. To accomplish the best results, there should be a collaboration between humans and machines that will need training and a reassessment of the future of the banking sectors.
Mass customization is the key to unlocking essential opportunities in the future and can happen only with technologies like AI and blockchain.