We must confess that banks are the ones that have recognized the potentials of Artificial Intelligence at a very early stage and adopted it in their transformation journey. They have adopted Artificial Intelligence to redefine products, processes and the strategies. This include predictive and cognitive capabilities enabled through cutting-edge technologies like Machine Learning and Deep Learning.
Machine learning is a subset of AI that provides systems with the ability to learn and improve from experience without being programmed explicitly. It involves development of computer programs that
can access data and use the data and algorithms to learn patterns, behaviors, trends, etc. and give outputs. On the other hand, deep learning uses multiple layers to progressively extract higher level features from raw data.
One of the main reasons behind the growth of AI in banking is that banks are in a data intensive business, So they can’t avoid artificial intelligence which is again a technology that can provide intelligent
predictions and recommendations by processing multiple data.
Moreover, banks have access to financial details of their customers and know them far more intimately than probably any other business. With AI they can make highly relevant recommendations about
financial products and services to their customers by leveraging such details. Also, as AI applications have the capabilities of automating many repetitive manual tasks, are playing the role of a game changer in
banking.
There are lots of AI applications coming up in areas like Anti-Money Laundering and Regulations. This is because it’s very easy for an AI system to analyze lots of data at its finger tips and determine the patterns and better identify frauds, money laundering and criminal activities quickly.
Smart wallet has become an area of interest for the banks. Banks are providing smart wallets to its customers. These AI enabled smart wallets will look at customer’s spending habits and learn from his/her behavior to provide smart advice and recommendations of future spending. It will encourage
savings and responsible spending in the form of predictive alerts and recommendations.
Similarly, AI can detect if a customer is likely to switch their products or services, this early signal will help banks to offer him/her a more suitable product which may help retain the customer.
Now coming to the Risk and Credit assessment areas, today if you want to apply for a loan, in a conventional way then a personal loan takes couple of weeks or may be even more to clear all analysis process before approving such loans. With Artificial Intelligence the processing lead time has
come down to an hour or two maximum. This is because AI is capable of doing credit
assessment in a much faster and better way by interrogating various customer data sources in the data mat. We are already experiencing the change in the interface the banks are having with their customers.
They are increasingly changing those to Chat Bots and robots as their first line of interfaces with their customers to enhanceservice experiences.
Also there are lots of AI applications coming up in areas like Anti-Money Laundering and Regulations. This is because it’s very easy for an AI system to analyze lots of data at its finger tips and determine the
patterns and better identify frauds, money laundering and criminal activities quickly. It can also highlight these to bank authorities well in advance so immediate action can be taken to arrest those activities.
Other areas in which AI is booming in the financial sector are human free branches; where they can use machines to serve customers end to end.
It will be interesting to see how AI will shape accounting and auditing in banks and the accounting and auditing profession as a whole. This is because data that used to be audited for weeks or months
can be run in AI models and the output will be in a matter of minutes.
CPA Albert Otieno is a member of the
Institute of Certified Public Accountants of Kenya.
