Md. Mizanur Rahman ACS :
Today, we hear a lot about the Artificial Intelligence (AI), which is often discussed in various channels. It is a new and modern concept which has become a hot topic in the banking sector. It is just like a kid who is pursuing its teenage. Every sector (whether it is agriculture, manufacturing, marketing or healthcare) is accepting the concept of AI. In 1956, an American Computer Scientist John McCarthy organized the Dartmouth Conference where the term “Artificial Intelligence” was first adopted. According to the father of Artificial Intelligence (AI), John McCarthy, “It is-The science and engineering of making intelligent machines, especially intelligent computer programs”. Actually, Artificial Intelligence is nothing but the intelligence presented by machines that performs complicated tasks such as learning, analyzing and performing different processes. Today banks are struggling to reduce costs, margins and exceed customer’s expectations. In this regard, banks are now adopting new-age -technologies for better growth prospects and to serve new age customers. Actually, banking sector is just like an ocean of opportunity for the AI. In banking sector, Artificial intelligence is basically more and more focused on customer relationship.
Being a fast-evolving technology, Artificial Intelligence is gaining much popularity all around the world. In the last few years banking sector has become one for the leading adopters of it. Many banks are excited about it. Many banks have already started to implement it to add more efficiency to their back-office and also to lessen the security risks. But some banks are still struggling to see how it can be applied to their businesses. An Open Text Survey of financial services professionals has said that almost 80% banks are highly aware of the potential benefits of the AI, while 75% of then have already decided to deploy AI in their banks. Actually, there are many areas where banks are using the AI such as; Customer Service, Credit Assessment, Fraud Detection, Asset Management, Internal Audit, Risk Management, Portfolio Management, Accounting, Business Process Management, Compliance, Cyber Security, Treasury, Marketing etc. Though in the very initial stage, it was adopted as a pilot project. But after using it, the respective banks realized that it has improved their overall productivity drastically. It would have a law error rate compared to the humans. They would have incredible precision, accuracy and speed. It can think logically without emotions and also can take rational decisions with very few mistakes. It can complete dangerous tasks even being affected by hostile environment. Especially, it has given customer service a new level of comfortability. It develops a better understanding of customers and their behavior. It enables banks to customize financial products and services by adding personalized features and intuitive interactions to deliver meaningful customer engagement and build strong relationship with the customers. It allows banks to meet customers’ expectations with comprehensive digital support. It ensures one-to-one customized interaction with the customers with the help of virtual assistance and chatbots. This service is obviously available 24×7 to the customers. The customers need not wait for the banks to open, for the concerned staff to be free or the relationship Manager to take the call to answer queries related to banking products or services. From the cash transfer to bills payment, Card Management and other support, it can enrich the satisfaction level of the customers significantly. As banking fraud is a big challenge for the banking sector and several banks are trying hardly to find out the factors as well as the solutions. Artificial Intelligence can make it easier to detect the factors involved in frauds and support the investigators in different ways. Another advantage is that it can quickly consume and process a massive amount of data at an expedited level. There is no doubt that, AI strengthens the competitiveness of the banks. These latest technologies are making banking processes faster. It takes minimum time to check the authentication of the necessary documents. It helps banks to predict the future outcomes and trends based on the past behavior. It increases the productivity of the employees drastically. It helps to focus on the profitability of the bank. It ensures compliance strictly. It can analysis different financial markets. Complex situations can also be handled tactfully by it.
Previously, the Artificial Intelligence was only used in the developed countries, but recently our neighboring country India has adopted this technology. In India, State Bank of India (SBI) introduced the AI at first. They have launched SIA (SBI Intelligent Assistant), a smart chat assistant , evolved from the “cutting edge” technology of AI that can resolve queries efficiently. It can capture the facial expression of the customers and reports whether the customer is happy or not. ICICI Bank has introduced an AI based Chatbot named “iPal” that have already answered 6 million queries, where almost 90% answers were accurate. It has further introduced “Smart Vault” that can be operated at any time minimizing the human interaction. It is a fully automated locker where Radio Frequency Identification mechanism scans the customer’s request and retrieves the locker using a robotic arm from a robust and secure vault. HDFC Bank has developed “EVA” (Electronic Virtual Assistant). According to the HDFC Bank, EVA-has already answered more than 2.7 million queries coming from 5.3 million users. Bank of Baroda has set hi-tech digital branch equipped with advanced gadgets like artificial intelligence robot named “Baroda Brainy”. Allahabad Bank said that its app “emPower” is schedule to get major enhancement like Chatbot and AI based ecommerce payment. City Union Bank launched the banking robot, “Lakshmi”. The robot can interact with customers on more than 125 subjects. Apart from answering generic questions the robot is also programmed to connect with the core banking solution. In 2018, Panjab National Bank announced its plan to implement AI in account reconciliation as well as using analytics to improve its audit systems. Axis Bank launched an AI-enabled app that uses natural language processing to enable conversational banking that helps consumers with financial and non-financial transactions, queries about the different products. In Japan, Deusche Bank has started to use Robotic process to save labour. Sumitomo Mitsui Banking Corporation is another Japanese multinational banking and financial services company adopted Automation in banking that has reduced 4, 00,000 hours of manual labor for its employees. It has increased their productivity and decreased their workload for the human workforce. OCBS, a Singaporean bank has been able to reduce to reduce the home loan assessment time from 45 minutes to just one minute by using the RPA (Robotic Process Automation). Bank of America launched “ERICA” in June, 2018. It is an activated virtual assistant which has more than ten million users. It has already faced 100 million client requests.
Artificial Intelligence can disrupt the banking sector massively. The maintenance of Artificial Intelligence demand huge costs since they are very complex machines. It consists of advanced software that requires regular updates to meet the needs of the changing environment. In case of critical failure, it may take much time and cost to recover the lost codes of data. Though Artificial Intelligence can learn but still it can not take decision individually. They can not work outside of what they were programmed for. It is it’s another limitation. Data works as a fuel. The availability of the right data is one of the main challenges for the development of AI. The next challenge is the privacy of the data. Another challenge is the lack of skilled human resource. Though AI will open new job opportunity, but it also true that the adaption of AI in the banking sector will cause unemployment. It has been developed to assist the human workers, not to be a substitute of them. But day by day human workers are becoming dependent of the machines as a result people will lose their creativity gradually. There is possibility that the human workers will become a slave to automated machines. The privacy of the human workers will be occupied by huge computer data. Moreover, If AI is used negatively then it may bring serious threat to mankind.
In the world of technology, Artificial Intelligence is the hot new buzzword calls. Now, it is the rising star. It has immense benefits to offer for the banking sector. It is changing the business process. There is no doubt that the recent push towards the digitalization is rapidly influencing the traditional banking models. Experts have predicted that by 2023, the application of AI in the Banking sector will minimize the operating cost amounting US$447bn. In the United States of America, researchers at the Oxford Martin School found that 47% of the overall jobs may become automatable. Some analysts have predicted that AI will give birth to new jobs, new way of utilizing technologies and ultimately new resources. Definitely, it provides banking sector competitive advantages. It can completely transform the banking sector and can make it easier, but this will only be possible only if the banking industry can manage the security risk of the risk of systems based on AI. It is not dream when banks will have AI based advisor, from whom the customers will get all the information about the products, services, policies and procedures. There is no doubt that, AI has a bright and promising future. Banks need to develop their infrastructure with one clear deployment platform across the organization and a method for managing models. It is important that employees should see AI as an opportunity not as a threat to their job. Today Banks and other financial institutions are under tremendous pressure to reduce costs and increase productivity. If AI can be applied properly, then it can drive down costs and can also improve the customers demand tremendously.
(Md. Mizanur Rahman ACS works at Pubali Bank Limited, Board Division, Head Office, Dhaka, also an Associate Member of the Institute of Chartered Secretaries of Bangladesh (ICSB); email: [email protected])
