Business
6 Ways Generative AI is Transforming the BFSI Landscape
Generative AI has enormous potential to disrupt the banking industry. From personalised consumer experiences to efficient operations, the advantages might be limitless. However, managing the problems of data protection, model governance, and changing legislation will be critical for banks to successfully leverage this powerful technology.
Here are several important areas ready for generative AI-enabled revolution in banking.
Credit Score Analysis
Generative AI has the potential to transform credit score by analysing data from various sources, such as social media, transaction history, and alternative financial data. This provides more accurate and nuanced credit scores, helping banks to make better lending decisions.
Customer Service and Chatbots
AI-powered chatbots can improve customer interactions by responding quickly, resolving basic requests, and assisting with difficult tasks. AI-powered chatbots enhance customer happiness and operational efficiency.
Fraud Detection and Risk Assessment
Generative AI models analyse transaction data patterns and anomalies to detect fraudulent activity more efficiently. This helps banks prevent financial losses and protect customers’ accounts.
Streamlined Compliance and Regulatory Reporting
Generative AI automates regulatory reporting, anti-money laundering (AML) checks, and Know Your Customer (KYC) procedures. This assures compliance with regulatory requirements while decreasing manual work. portfolios. These models help wealth managers to make informed decisions and maximize returns.
Personalised Recommendations
AI algorithms can analyse customer data to offer personalized product and service recommendations, improving customer engagement and satisfaction.
Financial Planning and Advisory Services
Generative AI can fuel robo-advisors, which offer automated financial planning and investing advice based on specific consumer needs and risk profiles. Further, Artificial Intelligence can analyse customer behaviour and financial patterns to deliver personalised insights and recommendations to help people make better financial decisions.
When deploying generative AI in the banking industry, it is critical to examine ethical ramifications, data protection, and regulatory compliance, just as it does with other transformational technology. Furthermore, a balanced strategy that blends AI capabilities with human control is required to foster confidence and ensure the appropriate use of these technologies.
The author is Vice President – Head API Banking, WhatsApp & Chatbot at Axis Bank.
Abhijit Dey will be speaking at Team Marksmen’s BFSI Transformation Leaders Conclave 2024 on March 22nd in Mumbai.
