How is AI Used in Banking?
Artificial intelligence (AI) has enabled innovation in the banking industry. AI is demonstrated by machines that makes it possible for them to learn from experience, and perform human-like tasks such as checking an account balance or performing support functions. AI powered technology has enabled innovation in the banking industry, enabling banks to examine millions and billions of data points to identify and uncover patterns or trends people may miss. Through the use of AI banks are offering personalization to help consumers make smarter decisions, detect fraud, and improve process automation.
What Are Some Examples of How AI is Used in Banking?
AI is playing a leading role as the banking world changes to better serve today's customer expectations. A Varo Money survey found that 79 percent of U.S. adults think AI could help them manage their money better and an even greater number said they would take advantage of AI tools if their bank offered them. Millennials in particular are interested in AI for mobile banking, including assistance with paying bills, analyzing cash flow and connecting accounts. While the terms artificial intelligence and machine learning can be used interchangeably, there are differences in the world of banking and finance. AI can perform human tasks to some extent. Machine learning is the process of gathering and analyzing the data that informs AI.
Here are some specific examples of how AI is used in banking:
Chatbots
Bank of America is leading the way in artificial intelligence in banking with its AI-driven virtual assistant, Erica. Twenty-five million mobile clients are able to use Erica to search past transactions, learn about their credit score and money management, schedule payments and transfer money.
Through conversational AI and banking chatbot technology financial service providers can connect with consumers on any device, using natural language processing across all major conversational ecosystems. The financial data from FSPs fuels machine learning accuracy and granularity needed for natural language processing within chatbots. Leveraging conversational AI can improve FSPs customer service and help consumers reach their financial wellness goals.
How AI is Changing Fraud Detection
In addition to efficiency gains, AI is also behind critical improvements in fraud detection and security procedures. Old methods produced too many false positives to be effective or efficient. Using artificial intelligence, humans can “correct” false positives and the computer won’t make the same mistake again. PayPal uses this technology to keep their fraud at a low 0.32 percent of revenue. Compared to the industry average of 1.32 percent, that’s a powerful testimonial for the effectiveness of AI and machine learning in finance. This cutting-edge technology improves the customer experience by making PayPal one of the most secure methods of payment for both individuals and small businesses. Solutions such as transaction verification and identity verification can validate and verify accounts and understand account behavior to prevent fraud and evaluate risk.
How is AI Used in Financial Services?
AI can predict the likely reactions of customers to various situations and challenges, making the financial industry decisions smarter and quicker. Artificial intelligence has revolutionized the financial services industry and, in turn, has changed the way we access, analyze, and understand information. As AI continues to grow in adoption across industries, the FinTech market will see an increase in financial service providers leveraging AI and machine learning technology to keep up with the consumer demand for personalized banking experiences. This adoption allows FSPs and third-party developers who want to take advantage of these advancements the ability to create new products or features for their customers.
View more examples of AI in finance.
Yodlee and AI in Finance
Envestnet | Yodlee is a pioneer in the world of machine learning. Our artificial intelligence app, AI FinCheck, is an integral part of our Personal Financial Wellness solution.
Yodlee’s data reach includes billions of transactions. Using predictive analytics, our solutions compare a customer to their peer group. This allows them to offer recommendations that are personalized to each customer, effectively giving consumers control of their financial destinies.
Only Envestnet | Yodlee brings together data + intelligence using the best financial data available. By applying artificial intelligence, Yodlee enables financial institutions and FinTech innovators to deliver better outcomes and solutions for their customers.
Yodlee’s data reach includes billions of transactions. Using predictive analytics, our solutions compare a customer to their peer group. This allows them to offer recommendations that are personalized to each customer, effectively giving consumers control of their financial destinies.
Only Envestnet | Yodlee brings together data + intelligence using the best financial data available. By applying artificial intelligence, Yodlee enables financial institutions and FinTech innovators to deliver better outcomes and solutions for their customers.