Digital disruption is redefining industries and revolutionizing the way businesses operate. Every sector explores options and adopts strategies to create value in a technology-driven world. The banking industry, in particular, is undergoing groundbreaking changes, with customer-centricity at the forefront.

Tech-savvy customers, exposed to advanced technologies in their daily lives, expect banks to deliver seamless experiences. To meet these heightened expectations, banks have expanded their industry landscape to include retail, IT, and telecom, enabling mobile banking, e-banking, and real-time money transfers. These advancements allow customers to access most banking services at their fingertips, anytime and anywhere. However, these innovations come with significant challenges for the banking sector.

Integrating banking with sectors like IT, telecom, and retail has increased the transfer of critical information over virtual networks, making them vulnerable to cyber-attacks and fraud. Such incidents not only affect the profitability of banks but also erode customer trust and damage relationships.

The dominance of mobile banking in today's digital age is undeniable. Customers demand convenience and choice, driven by the rise of fintech and open banking. In this fiercely competitive environment, banks must go beyond basic functionalities. Delivering a seamless and personalized customer experience (CX) is essential for retaining users, and this is where Artificial Intelligence (AI) steps in. AI is poised to revolutionize how customers interact with banking apps in 2024. The McKinsey Global Institute estimates that AI could generate a staggering $2.6 trillion to $4.4 trillion annually, with banking predicted to be a major beneficiary. This article explores how AI is transforming banking apps, paving the way for a more personalized, convenient, and secure banking experience.

Banking on Artificial Intelligence

Harnessing cognitive technology with Artificial Intelligence (AI) offers banks the advantages of digitization and helps them compete with FinTech players. Joint research by the National Business Research Institute and Narrative Science indicates that around 32% of financial service providers are already using AI technologies, such as Predictive Analytics and Voice Recognition.

AI is the future of banking, bringing the power of advanced data analytics to combat fraudulent transactions and improve compliance. AI algorithms can accomplish anti-money laundering activities in seconds, a process that traditionally takes hours or days. AI also enables banks to manage massive volumes of data at record speed, deriving valuable insights. Features such as AI bots, digital payment advisers, and biometric fraud detection mechanisms lead to higher-quality services for a broader customer base, translating to increased revenue, reduced costs, and boosted profits.

AI strengthens the competitiveness of banks through:

Enhanced Customer Experience

AI develops a deep understanding of customers and their behavior based on past interactions. This enables banks to customize financial products and services by adding personalized features and intuitive interactions, delivering meaningful customer engagement, and building strong relationships.

Prediction of Future Outcomes and Trends

With its ability to analyze past behaviors, AI helps banks predict future outcomes and trends. This capability allows banks to identify fraud, detect anti-money laundering patterns, and make customer recommendations. Money launderers often disguise the source of their illegal funds through a series of actions. AI, through Machine Learning and Cognition, identifies these hidden actions, helping banks save millions. AI can also detect suspicious data patterns among vast volumes of data, aiding in fraud management. Additionally, AI's recommendation engines study past data to predict future behavior, enabling successful up-selling and cross-selling.

Cognitive Process Automation

This feature automates various information-intensive, costly, and error-prone banking services, such as claims management. Cognitive process automation secures ROI, reduces costs, and ensures accurate and quick processing of services at each step. It fundamentally automates tasks, improving upon previous iterations through constant machine learning.

Realistic Interactive Interfaces

Chatbots identify the context and emotions in text chats and respond appropriately. These cognitive machines save banks time and improve efficiency, resulting in significant cost savings.

Effective Decision-Making

Cognitive systems that think and respond like human experts provide optimal solutions based on real-time data. These systems maintain a repository of expert information, known as a knowledge database, which bankers use to make strategic decisions.

Robotic Automation of Processes

AI transforms processes by applying Robotic Process Automation (RPA), automating about 80% of repetitive work. This allows knowledge workers to focus on value-added operations requiring high levels of human intervention.

AI-Driven Future

AI will not only empower banks by automating their knowledge workforce but also make the entire automation process intelligent enough to mitigate cyber risks and competition from FinTech players. AI is integral to banks' processes and operations, evolving and innovating over time with minimal manual intervention. AI enables banks to optimally leverage human and machine capabilities optimally, driving operational and cost efficiencies and delivering personalized services. These benefits are not a distant vision; by adopting AI, leaders in the banking sector are already reaping these rewards.

In conclusion, AI is a game-changer for the banking industry, offering a path to enhanced customer experiences, better fraud detection, streamlined processes, and effective decision-making. By embracing AI, banks can stay ahead of the curve, secure their future, and continue providing exceptional customer value.