AI or Artificial Intelligence is a machine’s ability to think and learn like humans. It has accelerated the digital transformation of the world. People initially feared and mistrusted AI technology because it seemed unnatural to possess a machine operating without human supervision.
The fantasy industry ate up this by telling stories of how AI takes over the planet and ceases human existence. However, soon people began to realize that these were just stories and eventually began to embrace the lasting advantage of the technology.
Artificial intelligence has enhanced business operations for various industries. Including financial institutions, healthcare, e-commerce, etc. Another primary industry that has benefitted largely from AI is the Fintech industry.
AI has assisted the industry in enhancing its operations with less time consumption and more affordability. Long gone are the simple ways of banking. AI integrated with Fintech has changed the face of the banking process with online banking, remote customer onboarding, and contactless payments.
According to research by Forrester. Quite 50% of monetary institutions and insurance agencies use AI technology for his or her business operation. Another research suggests that the worldwide AI market is predicted to extend up to the market price of $190.61 billion by 2025
With this blog, let us dig deep into how Artificial Intelligence integrated with Fintech is revamping banking operations.
Complications Faced by the Banking Sector
At one point or another in life. We all have had to experience the tiring task of opening a bank account. Standing in long queues. Waiting for your turn to come. Then providing your identity details and getting those verified is a lengthy and tedious process. We have all tried avoiding it as much as we could have.
This process is understood as KYC (Know Your Customer) that banks are obligated to perform on all their customers. The manual way of doing this is often frustrating for both the clients also because of the staff. It also costs the entity a huge amount of sum to hold out such procedures.
Even in any case of this. There’s no guarantee that the task was performed accurately. If there’s a mistake at the bank’s end, the institutions can face lawsuits and penalties, to not forget the priority of knowledge security of the info handled manually.
The KYC process is necessary for banks under the Bank Secrecy Act and the US Patriot Act. Now the global regulators like FATF are doing what they can to ensure that every country complies with such measures. The local regulators of each country are there to oversee if the banks are complying with the regulatory standards.
The KYC requires the banks to verify all their clients before onboarding them. They are to monitor and report any suspicious activity. If the banks are non-compliant, the regulators can enforce hefty fines and even permanently close the business.
Another research highlighted that it takes more than 34 weeks for customer onboarding procedures. The cost spent on the process is more than USD 25,000 per customer.
AI-Powered Innovations
The innovative solution of identity verification, powered by AI, is the perfect solution for the banking sector. The identity verification services can authenticate the identity of the possible client in a few seconds. The solution provides a variety of highly accurate services using different technological methods.
Here are some discussed in detail.
Face Verification
Artificial intelligence has given rise to facial recognition technology. One of the many use cases of facial recognition is identity verification. Face verification can analyze the facial points of the person’s face, and ensure their identity. The customer has to send their selfie along with their ID document.
And the technology handles the rest.
Document Verification
The machine learning of the AI ensures that document verification. The end-user has to send a picture of their ID document, and the AI trained on various document types. It can detect fraudulently, doctored, or stolen ID documents.
Video Interview Verification
This feature uses both humans and AI to carry out the verification process. The expert guides the end-user through the tactic. Alongside side human guidance.
This feature allows both face and document verification procedures for enhanced accuracy.
Biometric Authentication
This system is a trained biological feature of the person. The person has got to get their fingerprints, eye iris, or countenance scanned to verify their identity. Various industries are widely using this as a sort of security measure.
Revamped Banking Practices:
The AI-powered identity verification has provided the banking industry with countless benefits resulting in technological advancements.
Customer Onboarding
The artificially intelligent solution has increased the customer turnover rate by simplifying the customer onboarding solution.
The swift resolution has made the verification process very easy that customers don’t dread the long and tedious process. The end-user can open up the bank account from the comfort of their homes now.
Minimized Risks
The data of the customer is more secure than the manual procedure of verification. Humans can always make an error but coupled with AI, and it will reduce the risk of the error. The banking sector is secured by a reliable and accurate solution that leaves no room for the fraudster or the criminal to require advantage of the banks’ vulnerabilities.
Cost-Effective
The banking system can save tons of cash by reducing the value being spent on the manual biometric identification process. Not only the operation cost is reduced, the penalties and lawsuits also are avoided that were bought by the inaccuracy of the manual procedure.
Increased Productivity
Checking the identity of each customer can be mind-numbing for the employees. The intelligence of the workers is often focused on the enhancement of the business. It’s being wasted at such an earthly task. The AI-powered solution reduces human interference, which increases the employees’ productivity, leading to a more successful business.
This was our expert’s view. We hope you liked it, and please comment below to let us know if anything can get better or what you would like to read in the future as we priorities your experience and your feedback above all.
