Artificial Intelligence (AI) technologies are having a huge impact on India’s banking sector with its early adoption of chatbots as customer service agents and AI-enabled fraud prevention solutions that analyse huge volumes of data and detect patterns that human observers would miss.
The benefits of these developments for banks are obvious, and the potential cost savings are huge. A recent study predicted that by 2030, upto USD 450 billion in industry savings could be realised because of AI.
Beyond convenience and security, AI holds out the promise of enabling banks to delight customers - the holy grail of customer experience - now that loyalty to brands cannot be counted on in the same way as before.
Biometric data, such as fingerprints and facial recognition, can be used to individually tailor products as well as for security authentication.
Evolving natural language processing (NLP), machine learning (ML), image processing, and other cognitive learning technologies have the potential to push even further advancements in customer service and process automation, personalisation of services, and security and fraud prevention.
With Indians spending considerably more time on mobile phones compared to desktops, an AI-driven, personalised mobile banking experience will be extremely important in driving preference for your banking services over others. In order to take advantage of the emerging capabilities AI can deliver for India’s banking sector, organisations need to look beyond simple automation to more cognitive computing solutions.
The Indian finance sector is certainly keen to take advantage of AI’s capabilities even though AI adoption is still in its early stages. The State Bank of India conducted a “Code for Bank" hackathon last year to encourage developers to build solutions for the banking sector, leveraging cutting-edge technologies like AI and Blockchain. HDFC Bank has already introduced chatbots for customer service and experimenting with customer service robots at selected branches. ICICI Bank has focused on software robotics for business process automation in addition to introducing a chatbot.
There is still a long way to go to fully realise the benefits of these technologies. With ML, banks would have greater ability to customise services by taking the vast quantity of customer data banks hold, and enabling organisations to create truly individualised products, services and interactions.
Risk analysis can also have an element of personalisation. Biometric data, such as fingerprints and facial recognition, can be used to individually tailor products as well as for security authentication. Banks can also apply AI to process optimisation by automating high-volume, low-value processes, such as employee IT requests.
More work is needed on NLP capabilities if the sector is to expand use of AI for engagement with the country’s wider population that speaks more than 150+ major languages.
AI progress will not be all plain sailing. There are some unique challenges that the Indian banking sector faces in the use of AI. These range from the lack of credible, high quality data to India’s multiplicity of languages. Poor quality data affects the ability of AI to accomplish cognitive computing tasks accurately, which can lead to inefficiencies, bad decisions and negative customer experiences.
Additionally, more work is needed on NLP capabilities if the sector is to expand use of AI for engagement with the country’s wider population that speaks more than 150+ major languages.
Data access and data privacy also come into play as banks adopt AI. GDPR, although a European initiative, has a global impact, and India’s own Personal Data Protection Bill is likely to be introduced in Parliament soon. Banks in India will have to bear these regulations in mind as they build out their AI capabilities.
Despite the challenges, there is no doubt that more of India’s banks will evolve its operating structures to accommodate – and benefit from – an AI-enabled workforce. Allowing humans to work together with the technology will drive greater efficiencies in processes and operations, as well as provide improved experiences for customers and employees.
Mayur Trivedi is Head of Innovation, Mastek
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