Best 10 Use Cases Of AI In The Banking Sector - USM (2023)

AI For Smart Banking: How Can AI Modernize The Banking Industry?

Artificial intelligence in the banking sector makes banks efficient, trustworthy, helpful, and more understanding. It is strengthening the competitive edge of modern banks in this digital era. The growing impact of AI in banking sector minimizes operational costs improves customer support and process automation.

Besides, AI in banking also helps users to select loan amounts at an attractive interest rate. The AI technology in the banking sector allows banks to update processes automatically and work under existing regulatory compliance.

In this blog, we briefly explained a few core use cases ofArtificial Intelligence in the bankingsector. Let’s have a look into What AI can do for the banking sector?

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    Banking On Artificial Intelligence

    Artificial Intelligence in Banking accelerates digitization in end-to-end banking and finance processes. By implementing the power of data analytics, intelligent ML algorithms, and secure in-app integrations, AI applications optimize service quality and help companies identify and combat false transactions.

    Nearly 40% to 50% of financial and banking service providers are using AI in their processes to harness the power of next-generation AI capabilities. The companies believe that AI is the future of banking sector which can perform a range of banking operations in faster, easier, and more secure ways.

    Machine Learning, predictive analytics, and voice recognition tools are all increasing the value of digital banking services. AI Chatbots, facial recognition banking apps, and fraud detection systems and applications are all a few best examples of AI in banking and finance industry.

    If you are looking to implement an AI solution, here are a few best Use Cases of AI in the Banking Sector that you can try out.

    Top 10 Applications Of AI In Banking Sector

    AI in banking and financeis boosting the performance and competitiveness of banks and financial companies. The uses ofAI in banking industryare incredible. The banks are implementing AI for detecting frauds, enhancing customer experience, tracking customer behavior for recommending more personalized services, analyzing customer credit histories to predict risks associated with allotting loans, and many more.

    Below are a few significant applications of AI in banking and finance industries.

    AI In Banking Use Cases That Plays A Vital Role In 2022

    #1. AI Chatbots

    Best 10 Use Cases Of AI In The Banking Sector - USM (1)

    It is one of the best advantages of using Artificial Intelligence in the banking sector. AI banking Chatbots help customers in many ways.AI-based chatbot service for financial industryis one of the significant use cases of AI in banking sector. AI chatbots in banking are modernizing the way how businesses provide services to their customers.

    AI chatbots in banking industry can assist customers 24*7 and give accurate responses to their queries. These chatbots provide a personalized experience to users.

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    Hence, AI chatbots for banking and finance operations let banks attract customer attention, optimize service quality, and expand the brand mark in the market.

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    #2 AI Enhances Customer experience

    Best 10 Use Cases Of AI In The Banking Sector - USM (2)

    AI banking apps can do wonders. AI mobile banking apps for Android/iOS are aimed to improve customer experiences and service quality. Implementation of AI and Machine Learning in banking help companies in tracking user behavior and delivering highly personalized services to customers.

    Intelligent mobile apps using ML algorithms can monitor user behavior and derive valuable insights based on user search patterns. These insights would help service providers in providing personalized recommendations to end-users.

    Hence, 70% of the banks are looking ahead to integrating AI in mobile banking apps and stepping forward to embrace the golden opportunities of AI in banking industry.

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    Know more about theUSM’s Consumer Sentiment Analysis

    #3 Brings Automation & Makes The Process Seamless

    The use of Artificial Intelligence in Banking will accelerate automation and make your process seamless.

    Automation is one of the best AI use cases in finance and banking sector. AI has great potential in the banking industry. AI software helps banks in streamlining and automating every task which is done by humans and making the entire process simple and virtual.

    Therefore, AI applications can reduce the workload of bankers and optimize the quality of work. Through customized AI banking apps and AI Chatbot services, users can request service at any time and get accurate responses from AI virtual banking assistants all the time

    #4 Data Collection & Analysis

    Best 10 Use Cases Of AI In The Banking Sector - USM (3)

    There are many fold benefits of AI in Banking and Finance and automated data collection and analysis is one of them.

    Artificial intelligence in the banking sector can efficiently perform data collection and analysis processes. AI machines process massive data sets and extract valuable insights into data. This analysis will help banks to predict the future of their business and market trends with ease.

    Further, customer data analysis through AI-powered mobile banking apps will also play a vital role in delivering personalized services and enhancing the overall user experience. Moreover, banks can also make effective business decisions with the insights derived from the customer data and offer them more personalized service recommendations.

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    #5 AI for Portfolio Management

    Best 10 Use Cases Of AI In The Banking Sector - USM (4)

    It is one of the best benefits of AI in Banking and Finance sector. Wealth and portfolio management can be done more powerfully with artificial intelligence. It’s a fact that advanced technologies bring everything to our fingertips. AI helps those users who cannot visit the banks frequently. This innovative AI technology can manage banking services and strengthen mobile banking operations.

    On remitting money through digital banking apps, AI apps will track and send immediate transaction alerts to the users, if they trigger any suspicious transactions. AI machines immediately alert the user. Hence, AI ensures safe transactions.

    On the other hand, AI also plays a crucial role in the debit/credit card management system. It can automate the credit and debit card management system and makes the process safer. Artificial intelligence technology in banking eases the card authentication process and makes transactions safe and secure. Hence, AI systems advance mobile banking services.

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    #6 AI For Risk Management

    Best 10 Use Cases Of AI In The Banking Sector - USM (5)

    AI for risk management is one of the best applications of AI in banking. It is one of the significant advantages of AI-enabled smart banking services. For instance, checking financial status, document verification, and releasing loans are risk-related activities for bankers. The use of AI and machine learning in banking can tackle this intelligently.

    AI and machine learning in banking can do this task with more accuracy and privacy. AI-based mobile banking applications easily financial activities and analyze the banking data of the borrower. It could help bankers to identify the risks in giving loans to them. In addition, using the AI-driven risk assessment process, bankers can analyze the borrower’s behavior and thus can reduce the possibility of fraudulent acts.

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    #7 AI for Analyzing Sentiments

    The use of Artificial Intelligence in Banking and finance is going to the next level. AI in banking use cases is infinite. Artificial intelligence models in banking are used to analyze the mood of countless financial markets.

    Usingmachine learningtechniques, AI models can predict the market conditions and provide insights into the market trends. Because of this reason, artificial intelligence models are increasingly using in hedge fund management functions.

    Recommended To Read:AI In Banking – 7 Top US Banks That Are Investing In Artificial Intelligence

    #8. Next-gen Security Is Guaranteed

    Usage of AI in banking and finance ensures high-level security across banking functionalities.Top mobile app development companiesare integrating AI and developing the most advanced banking apps that monitor every transaction and protect the entire process like a firewall.

    USM Business System is providing thebest artificial intelligence servicesfor banking and finance companies on demand.

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    #9. AI Mobile Apps Detects Fraud

    AI smart banking services are mesmerizing service providers and customers in many ways. Artificial intelligence banking apps detect risks and minimize fraudulent acts. AI technology can scan transactional data and detect irregular user behavior patterns. Hence, using smart AI tools and apps, banking companies can protect their business from breaches.

    #10. AI for Compliance In Banking

    The use of Artificial Intelligence in banking is spreading at a rapid pace. The biggest organizations look at banks that follow regulatory compliance rules.

    The banking sector needs to continuously update its work processes under the existing compliance rules and regulations.

    Generally, most banks maintain an internal compliance team for this purpose. The compliance teams clean web pages and other internal documents to stay updated with the new rules. But, this process takes a lot of time and needs more capital to do manually.

    Artificial intelligence-based software products can actively find the rules that apply to the banks and make them compliant with those rules. AI software boosts the skills of compliance officers and allows them to scale their operations.

    These are a few benefits of AI in Banking and Finance. Implementations of all these applications of AI in banking would give profitable results for banking and finance companies and drive automation across customer interaction and service delivery.

    The Impact Of AI In The Banking Sector

    AI technology is occupying space in the banking industry at a rapid pace. Every business operation in the banking industry can be automated with AI. Thus, the role of AI in banking industry is enormous. Here, we have listed a few aspects of how can AI improve the banking industry.

    1. Cuts Operational Costs

    Most of the banks were already using AI, machine learning, and NLP technologies to bring automation into their workflows. Moreover, AI-powered systems and applications can perform repetitive tasks more accurately than humans. This intelligent process will ensure minimum operational costs and avoid errors in the process.

    Besides, the emergence of AI chatbots in banking industry is a revolution. With the deployment of AI chatbots in banking, banks can reliably provide 24*7 customer support and increase credibility. So, the development of AI chatbots for banking will cut the costs associated with human client support executives. It is a great impact of AI in banking. The banks can get rid of repetitive manual tasks and improve the quality of service.

    USM delivers user-friendly AI banking mobile apps that improve customer experience and let banks provide 24*7 services to clients.

    2. Improves Customer Support

    It is one of the significant aspects of AI in banking. Customer is a revenue-generating source for every business. A business that provides improved customer support will add value to its brand. It bolds your brand name in the market. Moreover, improved customer support without frustration also offers maximum customer retention rates.

    AI apps provide banking services even on public holidays as well. Can you expect this kind of support from a banker? No, this might not be possible with a banker to clarify customer issues, especially during the holidays.

    Thus, AI in banking helps banks provide the right services at the right time.

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    The best real-time example of AI in banking is Bank Of America’s Erica virtual assistant. This AI virtual assistant for banking clients gives personalized recommendations to users

    It automatically sends updates on credit reports. Besides, it also sends bill payment alerts to customers. Thus, Erica offers great personalized support to accounts.

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    3. Picks creditworthy clients to disburse loans

    Generally, most of us experience frustration when we apply for a personal loan in banks. The manual verification of transaction history and credit score might take long hours. And, the bankers make us feel tense even after we are creditworthy customers.

    AI use cases in finance will take this burden out from these complex credit functions. AI-based credit decision systems analyze customer transaction data and determine whether the customer is eligible for the loan or not in a matter of minutes.

    USM also has proven AI apps for the banking sector. We develop AI-based banking mobile applications that help customers easily apply for loans, credit cards, and cheque-book.Get your free quote now!

    4. AI helps banks run under regulatory compliance

    The healthcare and the banking industries are prone to frequently changing compliance rules. Every bank should provide banking services and support customers under existing regulatory compliance.

    A bank should not disclose its customer financial data and is highly prone to hacking. AI-based fraud analytics tools detect suspicious acts of hackers. In this way, AI helps banks to offer high-level protection of customer data. Further, AI systems also make processes compliant with the changing regulatory compliance.

    So, As A Banker, What Is Your Next Step?

    Still, the implementation of AI in banking is early in its adoption phase, and the AI opportunities for the banking sector are vast. The technology will give many benefits to banks and financial institutions. Whether it is an Android oriOS app, artificial intelligence will be a game-changer in the banking sector.

    As discussed in our top 10 use cases of AI in the banking sector article, AI-based mobile banking apps are brilliant in understanding the user’s behavior and providing a personalized experience.

    Are you looking to introduce a brilliant and affordable AI-powered mobile banking app?
    So, you are in the right zone now. USM makes it possible. Would you like to connect with USM?

    Our mobile app developers are experts in using AI,machine learning,deep learning, natural language processing, and predictive analytics usage. Being the mobile banking apps development company, we create top-notch mobile app solutions that fuel your business growth.

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      FAQs

      How AI is used in banking sector? ›

      Prediction of future outcomes and trends: With its power to predict future scenarios by analyzing past behaviors, AI helps banks predict future outcomes and trends. This helps banks to identify fraud, detect anti-money laundering pattern and make customer recommendations.

      Which two AI use cases apply to financial services? ›

      Use Cases for AI in the Finance Industry
      • Personalized Banking Experience. Delivering a context-based customer experience is no longer a nice-to-have option. ...
      • Credit Scoring. ...
      • Fraud Detection and Risk Management. ...
      • Loan Decisions. ...
      • Process Automation. ...
      • Algorithmic Trading. ...
      • Financial Robo-Advisory. ...
      • Enhanced Security in Transactions.
      3 Oct 2022

      What is the future of AI in banking? ›

      The role of AI in the banking industry is to enable banking services to run much more efficiently, securely and promptly, rather than taking jobs from people. The McKinsey report estimates that artificial intelligence can provide up to $1 trillion of additional value in global banking each year.

      Is AI used in ATM? ›

      AI does not only have the potential to drastically reduce the development time of ATM software systems, but it also provides the opportunity to solve problems which were previously believed to be unsolvable.

      What are 10 ways AI is used today? ›

      Here are 10 areas where AI plays an important role in helping humans with their everyday requirements:
      • Voice Assistants. ...
      • Entertainment Streaming Apps. ...
      • Personalized Marketing. ...
      • Smart Input Keyboards. ...
      • Navigation and Travel. ...
      • Gamified Therapy. ...
      • Self-driving Vehicles. ...
      • Facial Recognition Technologies.
      24 Jul 2021

      What are 3 types of AI do you use in your daily life? ›

      Voice assistants, image recognition for face unlock in cellphones, and ML-based financial fraud detection are examples of AI software currently being used in everyday life.

      Which banks are using AI? ›

      Examples of Companies Using AI in Banking
      • Ally Financial.
      • Capital One.
      • JPMorgan Chase.
      • Vectra AI.
      • Kensho Technologies.

      Which is the most used AI technology in banking and finance? ›

      Decision management software is an AI-based tool that forms a crucial part of business process management in banking and finance.

      What is the top challenge to using AI in banking? ›

      AI in Banking Software: Challenges Involved

      In adopting and executing Artificial Intelligence technology in banking solutions, there are a few challenges involved: Legacy banking solutions pose challenges in integrating AI. There is a shortage of skills & experience to precisely implement AI into banking solutions.

      How AI can improve banking? ›

      AI-based systems can help banks reduce costs by increasing productivity and making decisions based on information unfathomable to a human agent. Also, intelligent algorithms are able to spot fraudulent information in a matter of seconds.

      How AI is used in risk management in banks? ›

      AI technologies allow banks to assess a vast number of data points and quickly realize insights that help them protect against losses and boost ROI for their customers. Leveraging large, complex data sets, banks can develop risk models that are more accurate than those based on standard statistical analysis.

      Why must banks become AI first? ›

      As more customers adopt digital banking, banking industries must work on new methods to match the pace. To accelerate digital engagement and match soaring expectations, incumbent banks are becoming AI-first and AI-driven organizations.

      How is AI used in mobile banking? ›

      With AI integrated mobile banking apps, customers can set different types of personalized reminders for bill payment, low balance, suspicious activity and many more. This not only ensures better user experience, but also protects from fraudulent transactions.

      Which Indian banks are using AI? ›

      Leading the digitisation and adoption of AI in the Indian banking systems are private financial institutions like ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, etc.

      How AI is used in KYC? ›

      AI in KYC can facilitate onboarding by applying optical character recognition. Thus, instead of manually scanning through documents, companies adopt an OCR-based process: The customer begins the identification check by taking a snapshot of their ID and uploading it.

      What mean AI use in real life example? ›

      AI is used for face detection on social networking sites such as Facebook, where machine learning and deep learning algorithms are used to identify facial expressions and tag contacts. Using a slew of neural networks, deep learning is used to extract every bit of information from a picture.

      What is AI and give examples of its uses? ›

      Artificial intelligence is the simulation of human intelligence processes by machines, especially computer systems. Specific applications of AI include expert systems, natural language processing, speech recognition and machine vision.

      Is an example of AI in everyday life? ›

      Smart Assistants

      Perhaps the most popular use of A.I. comes in the form of digital smart assistants, such as Siri, Alexa and Google Assistant. These A.I. -powered personal assistants are able to take in your voice commands and translate them into actions, such as adding items to your shopping list or calling a friend.

      What is AI list few examples of AI? ›

      Apple's Siri, Google Now, Amazon's Alexa, and Microsoft's Cortana are digital assistants that help users perform various tasks, from checking their schedules and searching for something on the web, to sending commands to another app.

      What is artificial intelligence write five examples of artificial intelligence? ›

      The four artificial intelligence types are reactive machines, limited memory, Theory of Mind, and self-aware. Other subsets of AI include big data, machine learning, and natural language processing. Artificial intelligence examples include Face ID, the search algorithm, and recommendation algorithm, among others.

      What is the most powerful AI today? ›

      24, the construction of the AI Research SuperCluster (RSC) supercomputer, which is among the fastest AI supercomputers today and is expected to be the fastest by mid-2022, when it is finalized. Researchers are already using it to train large models in natural language processing (NLP) and computer vision.

      What are the 10 types of AI? ›

      10 types of AI applications
      • Online shopping. E-commerce companies use artificial intelligence technology to improve the customer experience. ...
      • Fraud prevention. ...
      • Autonomous vehicles. ...
      • Facial recognition. ...
      • Hiring. ...
      • Gaming. ...
      • Social media. ...
      • Travel.
      11 Mar 2022

      What are the 7 types of AI? ›

      7 Important Types Of AI To Watch Out For In 2022
      • Reactive Machines.
      • Limited Memory.
      • Theory of Mind.
      • Self-Aware.
      • Artificial Narrow Intelligence (ANI)
      • Artificial General Intelligence.
      • Artificial Super Intelligence (ASI)
      8 Mar 2021

      What are the main 7 areas of AI? ›

      Here are seven application areas of AI
      • AI in medicine. ...
      • AI in education. ...
      • AI in robotics. ...
      • AI in information management. ...
      • AI in Biology. ...
      • AI in Space. ...
      • AI in Natural Language Processing.

      Who is the father of AI? ›

      Abstract: If John McCarthy, the father of AI, were to coin a new phrase for "artificial intelligence" today, he would probably use "computational intelligence." McCarthy is not just the father of AI, he is also the inventor of the Lisp (list processing) language.

      What is AI give two examples AI application? ›

      The following are the examples of AI-Artificial Intelligence: Google Maps and Ride-Hailing Applications. Face Detection and recognition. Text Editors and Autocorrect.

      Where is AI used today? ›

      Manufacturing and Production. Live Stock and Inventory Management. Self-driving Cars or Autonomous Vehicles. Healthcare and Medical Imaging Analysis.

      How artificial intelligence is changing the banking sector? ›

      The introduction of AI and Low-code in banking has improved adaptability and resilience by bringing process improvement, saving crucial resources and time. The technologies are scalable and allow the institutions to make critical changes to meet future market demands.

      Where AI is used in Icici Bank? ›

      ICICI bank uses an AI engine powered by machine learning, NLP and semantic analysis to help the bank's system to understand customers' query, process and solve the issue through bank's interface, and give them an instant reply.

      Which is an example of an AI application in financial markets? ›

      Fraud detection, management and prevention

      Thanks to artificial intelligence, fraud detection systems analyze a person's buying behavior and trigger an alert if something seems out of the ordinary or contradicts your traditional spending patterns, according to Towards Data Science.

      How is artificial intelligence AI used in retail banking? ›

      Enhance customer experience

      And people have come to expect the same level of service from their banks. AI-driven technologies can deliver highly personalized user experiences. Intelligent voice and chat bots, not available in a pre-AI era, are changing and reshaping how banks interact and communicate with clients.

      How AI is useful in banking and finance? ›

      The strategic application of AI's many technologies -- including machine learning, natural language processing and computer vision -- can drive meaningful results for banks, from enhancing employee and customer experiences to improving back-office operations. Cost savings connected to the use of AI can be significant.

      What are the 4 main problems AI can solve? ›

      AI can:
      • Find trends, patterns, and associations.
      • Discover inefficiencies.
      • Execute plans.
      • Learn and become better.
      • Predict future outcomes based on historical trends.
      • Inform fact-based decisions.
      17 Mar 2020

      What are the use cases of AI in FinTech? ›

      AI in Fintech – Benefits and Use Cases
      • Enhanced security. ...
      • Optimized internal processes. ...
      • Better decision-making. ...
      • AI use cases in fintech.
      • Virtual financial advisors and chatbots. ...
      • Churn prediction. ...
      • Contract analyser. ...
      • Conclusion.
      3 May 2022

      How is artificial intelligence and machine learning used in banking? ›

      “Advanced cognitive technologies such as AI and machine learning are helping banks strengthen their TPRM programs by automating the manual effort, empowering banks to better identify and anticipate risk and more quickly conform to rapidly evolving regulatory requirements.

      What are the 4 types of AI? ›

      There are a lot of ongoing discoveries and developments, most of which are divided into four categories: reactive machines, limited memory, theory of mind, and self-aware AI.

      How the future of banking sector depends on AI? ›

      Artificial intelligence in banks is increasingly collaborating with financial technology (FinTech) companies to deliver improved banking solutions to their consumers as part of their digitization efforts. According to research, AI is expected to save banks $447 billion by 2023.

      Which algorithms is used in banking? ›

      Banker's algorithm, sometimes referred to as the detection algorithm, is a resource allocation and deadlock avoidance algorithm developed by Edsger Dijkstra that tests for safety by simulating the allocation of predetermined maximum possible amounts of all resources, and then makes an "s-state" check to test for ...

      How can AI help banks approve loans? ›

      Creating optimization in credit scoring

      AI technology that is correctly implemented and carefully chosen may help lending businesses optimize their credit scoring process, create tailored loans and provide scoring free of human biases.

      How artificial intelligence is changing the face of banking in India? ›

      With soaring customer expectations and with an aim of delivering a better customer experience, financial services providers are implementing AI technology into banking operations. Artificial intelligence has the potential to detect frauds, mitigate uncertain risks, and help manage regulatory compliance.

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