Ai in BFSI: A Powerful Tool that Helps BFSI Industry to Carry Various Activities Seamlessly
In this era of technology, artificial intelligence (AI) is entering every industry, and the banking, financial services, and insurance sectors (BFSI) are no exceptions. Currently, many banking and fintech companies are adopting new technologies to remain competitive. Moreover, AI can help banking and financial institutions in various ways, such as reducing costs, increasing efficiency, automating many processes, fraud detection, improving customer service, and many more.
Over the last decade, the banking, financial services, and insurance sector (BFSI) has undergone a lot of transformation. With the use of cloud computing and digitization, the BFSI has enhanced customer experience by optimizing costs and time. Now with the implementation of artificial intelligence, the BFSI industry can provide personalized services to customers by keenly understanding their needs and expectations. This can lead to providing optimized services by delivering a seamless, innovative, and delightful customer experience.
With the increase in the demand for AI-based security features to gain customer loyalty and improve customer interaction, the global AI in BFSI market is expected to experience exponential growth in the approaching years. The market is anticipated to generate a revenue of $84,337.5 million and rise at a healthy CAGR of 19.1% over the analysis timeframe from 2021 to 2028. The major players of the market include Google LLC, Amazon Web Services (AWS), Inc., Oracle Corporation, Microsoft Corporation, Intel Corporation, and many more.
What is the Role of AI in Strengthening the BFSI Industry?
AI-powered technologies have the capability of helping the BFSI market in so many ways such as optical character recognition technology (OCR) that allows auto-filling forms by extracting user details from the uploaded identity documents, an accurate and extensive credit risk profiling by using data from various sources such as income statements, credit score, employment history and many more. Some of the major applications of AI in the BFSI industry are listed below:
- Providing Realistic Interactive Interfaces: Chatbot is an AI-enabled technology that helps banking and financial institutions to identify the context and emotions of clients in the text chat and respond to them appropriately. This feature of AI helps BFSI to save not only time but save millions of dollars and improve efficiency.
- Providing Personalized Banking Services: In the current world, personalization acts as a powerful tool for all industries where customer experience has a crucial impact on market success. With the recursive learning capabilities, machine learning algorithms can gather both historical and real-time data customer data to develop personalized recommendations and customize the virtual assistant’s support for enhanced customer experience. AI-fuelled personalized virtual assistance provides customers a sentiment of feeling unique and heard which creates trust and reduces their effort in searching queries related to banking services.
- Delivering Speed, Flexibility, and Agility: Unlike traditional banking, AI has delivered unparalleled services with greater speed, agility, and flexibility. It has made the entire banking system contactless and paperless through which any information can be drawn instantly to serve the customers. Moreover, AI has made many banking activities convenient to the customers through which they can perform them at their home with all comfort such as digitizing the KYC processes by using AI-based OCR to verify uploaded documents.
- Enabling Effective Decision-Making: AI-enabled cognitive systems that can think and respond like human experts, and offer optimal solutions to the customers based on available data in real-time. These systems hold on to a repository of expert information in a database which helps bankers to make strategic decisions.
- Fraud Detection: AI enables banks to incorporate unsupervised algorithms in their systems that can detect unusual patterns, speeding up the review process and preselecting the anomalies that will be verified by a real-life expert in the ahead steps. This further helps BFSI to cut the costs of installing fraud detecting applications and increase their effectiveness by minimizing the probability of human mistakes.
- Reaching the Unreserved Consumer Segments: The data revolution and implementation of AI have helped BFSI to penetrate the underserved consumer segments. AI eliminates the limitations of physical distance as anyone can access banking services with their smartphones. This further helps BFSI to widen its customer base by enabling smooth workflows.
Artificial Intelligence: The Driven Future of BFSI
In today’s world of digitization, data is the new oil and AI helps enterprises to interpret a huge amount of data generated every single minute and secure them from any kind of misuse. Especially for the BFSI industry, AI not only empowers it by automating the knowledge workforce but, also protects the whole process of automation from increasing cyber risks. With the continuous evolution and innovation of banking and financial services, AI will enable BFSI industries to leverage human and machine capabilities to bring cost efficiencies, increase productivity and ensure safety in the near future.
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