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Artificial Intelligence is a heaven-sent blessing that has revolutionized the way the world operates. Our day-to-day tasks have been transformed with this intelligent solution that thinks and learns like a human. People may fear or mistrust this technology due to the misconception that it is taking over the world and will eventually destroy the very core of it. However, it is quite the opposite. With the use of artificial intelligence, everyday experiences in various industries like e-commerce, the health sector, financial institutions, etc. have become less time-consuming and more affordable.
One of the major industries that have benefitted from this technology is the Fintech industry. Fintech using artificial intelligence has replaced the conventional banking system with an enhanced procedure of delivering quality services along with better affordability.
According to a report by Forrester, More than 50% of the financial companies and insurance companies are applying the use of artificial intelligence for their services. There is a good chance that this percentage will increase with more advancement in technology.
Through this blog, let’s shed a light on how Artificial Intelligence has helped Fintech to improve banking practices.
We all have experienced the task of going to banks for account opening or just general transactions. We have also experienced how tedious this process is due to the lengthy verification process of proving one’s identity. This procedure is not only fatiguing for the customers, but also for the banking staff that has to manage the data of each and every customer they are onboarding. A ton of cost is spent on this process and yet there is no guarantee that the procedure is without any errors. Data security of every potential customer is also another concern that can cost banks a lot in the form of lawsuits.
Another study by Forrester Consulting indicates that it takes around 34 weeks for customer onboarding procedure while the money spent on this procedure costs up to the US $25,000 per customer.
The process of carrying out this verification process is also a necessity. Other than the fact that fraudsters, identity thieves, and money launderers are in a race to take illegal advantage of these financial institutions, the verification procedure is also a requirement under law that all financial institutions and banks must comply with.
In the 1970s, The Bank Secrecy Act was surpassed to eliminate fraudulent activities. According to this act, all banks and organizations must identify their customer before onboarding them. In case there are any risks related to them, the organization is to inform the concerned regulatory body of any suspicious activity for further investigation. In case they fail to comply with these measures, the organization will not only face millions’ worth of penalties but also they might lose their license to operate.
Artificial Intelligence has answered this problem with an identity verification solution. There are fintech services that can verify the identity of any potential client within seconds and that is not even the best part. This solution can provide a highly accurate service with various features of verification.
Here are some examples of these features explained in detail:
The use of facial recognition technology can now analyze and verify the identity of the person through their face. The customer being onboarded can now get verified just by sending their selfie-picture or selfie video. The AI-powered solution can match the picture of the person and verify their identity.
The AI-powered solution is trained through machine learning to verify the authenticity of the identity document. It can analyze the format of the identity card and detect any tampered document. The customer just has to send a picture of the identity card and the rest is left to artificial intelligence to carry out the verification procedure.
This is another great feature that performs customer verification through a video-based interview. Artificial intelligence can perform both face verification and document verification through this procedure.
Biometric authentication has secured the world with the use of artificial intelligence. Advanced technology can use the unique biological features of an individual to verify their identity. These features could be their fingerprints, iris of an eye, or even the face.
The banking industry has seen a significant number of advantages due to these solutions. Listed below are a few that are discussed in details:
This process is efficient and has increased the rate of customer onboarding. Due to this, the customer does not have to dread the long and boring procedure of opening a bank account. They can now deal with their banking tasks within seconds from the comfort of their homes. Now more customers prefer banks that provide such services.
This process allows data to be more secure than the manual process. The human eye can be a cause of error no matter what. They can skip some important information or misplace any document. This artificial intelligence has got this covered as well. It secures the data in the back office and extracts it whenever required. The customer also trusts the organization that has such a premium service.
The banks no longer have to hire large labor and then spend a lot of money on managing it. The more secure service with more accuracy means a lack of lawsuits and fraudulent attempts. Now the banks can use the same cost to invest in something for better opportunities.
The key point is to embrace the digital shift of the world and take full advantage of the artificial intelligence solution for more secure and enhanced banking operations.