|A report projected that AI applications could save an estimated $447 billion for banks by 2023 / Credits: PopTika via Shutterstock|
Advances in artificial intelligence have brought new innovations and applications, driving more success to industries. One of these industries is the banking sector. The recent “AI in Banking and Payments” research report from Business Insider Intelligence discussed the winning AI strategies used by financial institutions. It emphasized different financial institutions that have successfully implemented AI solutions. It also provided recommendations for how banks can best approach an AI-enabled digital transformation.
According to Business Insider, a fast-growing business site with deep financial, media, tech, and other industry verticals, it is projected that AI applications could save an estimated $447 billion for banks by 2023. The front and middle office account for $416 billion of that total. The report showed that 80% of banks are highly aware of the potential benefits brought by AI. In fact, numerous banks are planning to integrate solutions enabled by AI.
Banks across the world can use AI to save costs in three main channels, including front office (conversational banking), middle office (anti-fraud) and back office (underwriting). The report emphasized how banks are utilizing AI on the front end to mimic live employees through chatbots and voice assistants, smooth customer identification and authentication, provide personalized insights and recommendations, and deepen customer relationships.
Also, 75% of respondents at banks with over $100 billion in assets stated that they are currently implementing AI strategies. This is much higher compared with 46% at banks with less than $100 billion in assets. Several AI applications have also become popular across banks' operations, including chatbots in the front office and anti-payments fraud in the middle office.
Additionally, banks undergoing an AI-enabled transformation revealed some strategies they are using to maximize the technology. This includes the need for a holistic AI strategy that extends across banks' business lines, usable data, partnerships with external partners, and qualified employees.