AI In Banking: Know the future of your money

Banks' big AI leap: The Indian banking sector is leading almost on all parameters, be it profitability, leveraging artificial intelligence for customer grievance redressal mechanisms, detecting frauds, and efficient banking. A textual analysis performed between 2015 and 2016 gives a glimpse into how banks are fairing on artificial intelligence, machine learning, and automation.According to the Reserve Bank of India’s report on banking and its trends showed that the usage of AI-related keywords in Indian banks has increased sizeably, especially in private sector banks. However, the adoption in public sector banks has been relatively muted but has still risen around 2.5 times over the sample period.Banks Riding on AIA survey shows that at the end of June 2023, 11 out of 12 public-sector banks (PSBs) and 15 out of 21 private-sector banks (PVBs) already had some form of chatbot and virtual assistant using AI and ML technologies.In most of the cases, the chatbots are accessible through the banks’ websites. In the case of PSBs, mega-mergers seem to have given a boost to the adoption of chatbots, with merged entities adopting the technology of acquirers. A word cloud analysis reveals banks’ focus on automation, which may be driven by the objective of reaping efficiency gains and strengthening fraud detection and other predictive analytics.“AI is increasingly being used in areas such as asset management, algorithmic trading, credit underwriting, and blockchain-based financial services,” the RBI said in its reports. As per the apex banks analysis, AI is expected to transform the financial services segment by spurring the creation of new products and services, opening up new markets and industries, and paving the way for innovation.The awareness or possible adoption of relatively newer technologies like Robotic Process Automation (RPA), the Internet of Things (IoT), and Natural Language Processing (NLP) is noteworthy, the apex bank opined. One of the prominent usages of AI across service industries is chatbots that can converse — either through text or through voice — with human users in natural languages.Banks AI and ML LingoAccording to a recent survey, about one-third of the respondent financial services companies expect 51 to 75 per cent of their workload to be supported by AI technologies in five years. The same is being done by Indian banks, be it private sector banks or public sector banks.The RBI analysis also revealed that almost every bank in India is leveraging popular dictionaries/glossaries related to AI and ML such as Google Vertex AI, Google Developers, IBM, NHS AI Lab, the Council of Europe, and Large Language Models like ChatGPT, and Bard. NBFCs are also introducing chatbots for customer services.Indian banks have used an exhaustive list of terms and words related to AI, and Machine Learning. The world includes chatbots, Artificial Intelligence, Cloud Computing, Machine Learning, Customer Segmentation, Data Analytics, robotics support automation, the Internet of Things, and many more.In the annual report of FY23, ICICI Bank used the word Artificial Intelligence six times, Machine Learning four times, Cloud Adoption and computing over nine times, and Data Analytics five times. In the HDFC Annual Report of FY23, the bank used Machine Learning five times, and Artificial Intelligence ten times, Cloud 25 times, and Data Analytics three times. India’s largest public sector bank, State Bank of India used Artificial Intelligence three times, Machine Learning two times, and Data Analytics only once.Chatbot CharismaAs per the RBI study in 2016-2017, the number of banks using chatbots stood at 5, which went to 10 in FY18. From 10 in FY18, the number of banks having chatbots went up to 12, and finally, in FY23, almost 26 banks in India are using chatbots.HDFC bank used chatbot words in its annual report six times and mentioned about its chatbot. The bank launched its first AI-based chatbot to provide customer service. In the annual report of HDFC bank, chatbot for 6 times. Similarly, SBI launched the chatbot, known as SBI Intelligent Assistant, or SIA, which will help customers with everyday banking tasks just like a bank representative.Axis Bank launched a chatbot known as Axis Aha in 2018, which handled 20M queries with 97 per cent accuracy. After the launch of Chatbot, the number of new users has increased 31 times, while transactions have grown 50x, indicating the effectiveness of Aha in addressing the identified problems and providing value to Axis Bank and its customers.

Advertisement

AI In Banking: Know the future of your money

Indian banks have used an exhaustive list of terms and words related to AI, and Machine learning in their annual reports.

Advertisement