AI has not merely become an auxiliary component but the backbone of the BFSI sector
The use of Artificial Intelligence (AI) in the BFSI industry was evolving even before the onset of COVID-19. However, the disruptive ripple effects of the pandemic compelled all industries to reevaluate their strategies, and seek solutions to mitigate liabilities, align with evolving customer expectations, and protect their assets. The BFSI industry was no exception to this paradigm shift. In the current landscape, AI has assumed a pivotal role in the sector, helping organisations work continuously towards customer-centricity, systematic compliance management, and seamless operations. The conventional brick-and-mortar banking model is swiftly losing its sheen, and AI has become the guiding compass for financial institutions, allowing them to tailor their services with meticulous precision.
AI’s emergence within the BFSI sector is most evident in the proliferation of AI-powered digital assistants which offer personalised and precise responses to customer queries. As per MarketsandMarkets, the conversational AI market size is expected to increase from USD 10.7B in 2023 to USD 29.8B by 2028 with a predicted CAGR of 22.6% during the forecast period.
Natural Language Processing (NLP) also plays an instrumental role in expediting the scanning and processing of documents, thereby saving time and reducing risks. AI-enabled biometric authentication ensures the protection of sensitive financial data, safeguarding it from malicious cyber threats. The utility of AI in the battle against fraudulent activities like phishing, identity theft, and document forgery is particularly remarkable. AI algorithms help in spotting suspicious financial transactions and activities, swiftly raising red flags as a protective measure. By meticulously analysing a customer’s spending patterns and behavioural data, these algorithms can unmask unusual or suspicious activities, prompting immediate alerts to the customer or the bank, enabling swift corrective actions to be taken.
As consumers increasingly adopt digital banking services, they grow to expect more. This has resulted in banks and financial institutions not only standardising but also personalising their service delivery across various online banking and e-banking channels. Customers can now rely on predictive analytics to obtain bespoke financial recommendations, thereby making more informed decisions about their finances. Additionally, AI streamlines loan facilitation, rendering the once tedious, paper-based application obsolete. This newfound efficiency also helps in updating customer records at an accelerated pace.
While AI shoulders the burden of managing a substantial volume of frequently asked questions (FAQs) and automating many process-based tasks, it also allows banking executives to free up their time, making themselves more accessible to customers. This engagement serves as a reminder to customers that their relationship with the financial institution is not entirely automated and is based on human values, such as respect and trust.
Global Head
Visionet BPS & DocVu.AI
The contemporary landscape of banking and financial services revolves around the imperative of offering a superlative digital customer experience, catering to the tech-savvy millennials and Gen Z customers. To thrive in this ecosystem, banks and financial institutions must consistently raise the bar on personalisation, striving to anticipate customer needs before customers themselves become aware of them. This endeavour involves providing highly tailored services, delivering them with impeccable timing and precision through the most suitable channels.
In sum, AI has not merely become an auxiliary component but the backbone of the BFSI sector that aspires to excel in customer-centricity, compliance management, and operational excellence in an ever-evolving world. In this era of continuous innovation and evolving customer demands, AI’s transformative influence on the BFSI sector is undeniable. As financial institutions continue to harness its capabilities, the synergy between AI and the financial industry will undoubtedly shape a more resilient and customer-focused future.
