As I have summarized in my different articles, 2018 was a very dynamic year for the IT industry. We have witnessed many processes such as the efforts of institutions to integrate artificial intelligence (AI) technology into the business world to increase efficiency, and as a result, the implementation of artificial intelligence algorithms that can challenge their rival institutions.

It is a very broad term that hosts many different technologies such as artificial intelligence (AI), machine learning and natural language processing (NLP). Every day, we hear about a different project of a different bank in the field of artificial intelligence in the banking and finance sector. Analysts, on the other hand, estimate that artificial intelligence will bring more than US$1 trillion in additional benefits to the banking industry by 2030.

I don’t want to risk the rest of this post by saying that my predictive power of technological developments is as good as any “futurist”. The main reason for this is that innovations in the field of technology take place very quickly and many developments can lead to undesirable results as well as improvement and efficiency. Nevertheless, in this article, I would like to mention the benefits that artificial intelligence can bring to institutions and users in the near future for the banking sector.

1- Improved banking products

The banking and finance sector has been growing by leaps and bounds in recent years. Worldwide, millions of banking transactions are done online, regardless of time and location. Automated transactions and applications are extremely important for integrating artificial intelligence into the banking system and mobile banking applications. The main role of artificial intelligence in the banking sector, according to many experts, is to improve customer service.

As most of us know, artificial intelligence is a technology that can analyze a wide variety of data types and thus provide fast and accurate information about customer behavior and preferences. It is an extremely critical issue for banks to be able to provide the best possible banking services to customers by perceiving the needs and requirements of the customers. Detailed and fast analysis of users’ historical data plays an integral role in revealing the usage habits necessary to provide the right products and services to the user.

Artificial intelligence technology works with the principle of data collection and analysis. A mobile banking application enriched with artificial intelligence features can collect all relevant and useful data of users to improve the learning process and user experience. After collecting and analyzing this data, the experience and services offered to the user can be personalized.

In addition, data on financial transactions helps bank users understand their purchasing / usage habits. Based on this data, the bank can prepare a customized investment or payment plan and assist its clients in budgeting. Again, based on user data, banks can send recommendations to their customers so that they can control their spending and investments.

Asset and portfolio management can also be designed more effectively and efficiently with artificial intelligence. The theme “banking at your fingertips” has been around for a long time for users who don’t like visiting banks at all. Customers can take advantage of automated and secure transactions with artificial intelligence, and receive instant notifications for any suspicious transaction according to their usual habits.

Another useful application of artificial intelligence is the card systems of banks. Artificial intelligence not only automates the credit and debit card management system, but also makes it more secure. In case of loss of a card, it allows the customer to avoid a long authentication process, thus saving time and effort.

2- Chatbots

Like any other institution, it is critical for banks to acquire new customers and provide customers with the services they need by providing an excellent user experience. People no longer visit banks to get simple information about interest rates, loan types or other instant banking services offered by banks. All customers have to do is visit the website of the relevant bank and have instant access to all the information they are looking for.

We know that chatbots are the most popular software using artificial intelligence technology today. Customers find it annoying to call bank call centers or email banks when they have a question, but it’s easy and fun to answer the question ‘Hello, How Can I Help You?’ asked by a chatbot on a bank’s website or mobile app. it can happen.

Compared to phone call, chatbots are considered more efficient and faster by users as they can provide useful links to users to complete any action. Chatbots also significantly reduce the workload of customer service managers with the connections they provide during communication. While customer service workers are constantly looking for new ways to serve customers well, time constraints and the number of people they can serve in a day are limited. In this sense, chatbots seem to be very useful for both banks and users.

3- Real-Time Fraud Detection

As we all know, the financial sector is exposed to numerous security threats and fraudulent activities. According to a report recently released by McAfee, fraudulent activities in the financial sector around the world are equivalent to a global economic loss of approximately $600 billion. As the technologies used change, banks have to develop new methods to combat threats and fraud and use these methods in the most effective way. In parallel with this, big data plays an important role in obtaining in-depth information about customer behavior patterns of banks. When we evaluate the issue of financial risk reduction, new solutions developed with artificial intelligence infrastructure and new advanced financial models will help banks to detect fund flow analyzes in real time and to stop fraudulent transactions as soon as they are discovered.

Banks have to be accountable for providing safe and fast transactions to their customers. Artificial intelligence can be used to detect fraud in these transactions based on predefined rules. In addition, mobile banking applications can detect any suspicious activity in any customer’s account based on behavioral analysis. For example, based on the small volume of transaction history in the customer’s account, any large online transaction can be stopped instantly.
Although there is content in many sources about artificial intelligence in the banking and finance sector and much has been said in the media, few banks in our country have started full production and even full-scale research on this subject. Banks seem to understand that they cannot ignore artificial intelligence in the current situation. In order to produce the solutions they promise themselves and their competitors, they have to develop a strategy specific to artificial intelligence. In the very near future, artificial intelligence (AI), from fraud detection to loan application and disbursement, from risk management to customer experience, seems to increase the speed, precision and effectiveness of human efforts in banking and finance.