The banking sector has demonstrated increased adoption of AI-powered technologies in the past few years. In fact, research suggests that AI in the banking market is expected to grow at a whopping CAGR of 32.36% up until 2030. Now, a fresh wave of innovation powered by generative AI (or GenAI) technology is engraving its foot in the financial sector, and for all the right reasons.
Generative AI imparts deep learning models with the capacity to generate completely new content (for instance, text, images, videos, etc.) based on the data assimilated. One of the main catalysts for generative AI in banking is the intensifying requirement for personalized and effective banking services — be it associated with customer support, credit, wealth management, or investment.
Generative AI presents a way to parse voluminous amounts of data, mechanize tasks, and equip customers with tailored solutions.
As per McKinsey’s latest analysis, the use of generative AI across the banking ecosystem could create additional value of $200 billion to $340 billion. To that end, here’s a profound insight into the most relevant use cases for generative AI in banking:
A 2023 research revealed that one-third of the banks lost half a million US dollars to identity fraud in 2022. If we account for all types of fraud, the cumulative value of losses incurred by banks over the years will be substantial. This illuminates the necessity for inventive techniques to keep financial misconduct from impairing financial institutions.
This is where generative AI can come in to detect anomalies in transactions, customer behavior, and even documents such as signatures and IDs. The natural language processing capabilities of GenAI solutions can be leveraged to sift through massive volumes of data, identify discrepancies, and map taxonomies of conversations and transactions.
Generative AI is also capable of continuously adapting and mastering novel fraud schemes, thus making it an efficacious instrument for outperforming cybercriminals.
Maintaining strong customer relationships is fundamental to the prosperity of any bank. Back in 2017, an Accenture survey revealed that 79% of bankers believe AI will transform how banking institutions harvest data and engage with their customers. Fast forward to 2023, and this is becoming well and truly right.
By being knowledgeable of their clients’ requirements, banks can provide an enhanced customer experience. We already know that AI-powered solutions can analyze large amounts of data in a fraction of the time it would take human employees and can provide decision support that is more accurate than human experts.
Now, GenAI can further power chatbots and virtual assistants for instant customer support, answering rather sophisticated queries, assisting users with transactions, and even providing financial advice. It can improve the routing of empathy-driven cases to human agents and even assist on the agent side by analyzing the case history and offering recommendations in natural language.
Risk assessment and compliance are critical to the banking ecosystem since financial institutions house massive volumes of sensitive data and have to comply with both regional and state-level regulations.
Generative AI can streamline risk assessment and compliance processes by allowing professionals to work with synthetic data to identify anomalies, validate processes, train machine learning models, and more. GenAI solutions can even help in quickly creating programs that can reduce changes of any oversight in regulatory assessments.
In 2020, Gartner claimed that 40% of privacy compliance technology will rely on AI by 2023. Considering the pervasiveness of GenAI solutions and their prowess in regulatory assessment, it’s highly likely that a more substantial chunk of compliance workflows come under the purview of generative AI going forward.
Portfolio management and investment decisions necessitate an intimate comprehension of the market’s fluctuating nature as well as a perpetual assessment of financial information.
Favorably, generative AI can be used to analyze the performance of individual investments as well as entire portfolios. It can also help investors determine which investments to make and when. With its ability to look at multiple data points simultaneously and produce natural language content, generative AI can provide investors with a unique, holistic perspective on different investment approaches.
Besides this, GenAI solutions can equip asset managers to share knowledge across investment teams, which otherwise operate in silos. They can easily transfer insights via natural language and reduce the time and effort in creating documents in the first place.
Often, financial advisors find themselves bogged down by redundant tasks and workflows. GenAI solutions can alleviate such challenges by supporting advisors in only concentrating on what matters the most for their interactions with customers. For example, generative AI solutions can take care of note-taking, summarizing, and even brainstorming through call interactions between advisors and customers.
Furthermore, generative AI can aid financial advisors in crafting extensive reports and coming to well-informed decisions related to capital allocation. This way, they can enhance their capacity to help individuals limit their risk, improve returns, and take actions likely to result in beneficial fiscal results.
The transformative power of GenAI is revolutionizing the banking industry; it provides innovative solutions to long-standing operational challenges that entail redundant manual work.
As technology advances and refines, banking institutions that adopt it will acquire a beneficial competitive advantage in providing tailored, effective, and secure financial services.
Are you prepared to experience a radical transformation of banking with GenAI? Partner with Verinite today to leverage generative AI, optimize your operations, strengthen customer interactions, and remain a front-runner in the industry.
Contact Verinite today and start your own journey towards a more innovative and efficient future for your banking institution.