Artificial Intelligence – How it started in Banking
Banking industry is one of the several industries that are spending heavily on Artificial Intelligence today. Banking and finance companies have already started spending a huge amount of money in activities like ‘voice-based commerce, customer behavior analysis, chatbots for customer services, identity identification, fraud investigation, credit risk calculations, threat prevention’ etc., with the assistance of AI. Banks are increasingly looking at AI so that they are able to more effectively use the growing amount of data that they hold across a variety of their business lines.
This predisposition towards artificial intelligence (AI) is not a recent phenomenon. The financial services industry started looking at AI as a growth enabler, way in early 1980s. At that time, Citibank was aiming at setting up expert systems in their investment business, that would make faster decisions than human beings.
The ideas and efforts about using AI and related technologies in banking have been there for more than 30 years. The financial industry started using automation long before AI became a reality, it began with automating the routine tasks, like updating savings books, customer verifications, carrying out cash deposits, salary uploads, etc. Later on, AI and its different applications greatly transformed activities, such as risk and wealth management, and customer service.
But largely, technology at banks started as being outsourced and then moved to become more collaborative. Initially, the banks focused on automation to reduce costs. Online banking evolved quickly, but its use was restricted to a few places across the world. Around the world, less than 500 million people were using online banking as late as the mid-2000s.
By 2010, banks realized the emerging impact of mobiles and smart apps on the financial services industry. And by 2015, it became clear that mobile messaging was emerging as the preferred method as customers liked unstructured communication. This new channel required investments into AI technologies. An AI platform could help the banks in various ways. It could help the banks to have a better conversational style through ‘Text’ or ‘Voice’. Also, the banks could start having intelligent conversations with customers by using predictive services offered by AI.
Would you like to read more about this topic? This book might interest you: Artificial Intelligence in Banking.