Artificial Intelligence in banking: Global and Bangladesh perspective

ASM Ahsan Habib and Rafiqul Islam | Published: January 02, 2019 20:47:15 | Updated: January 06, 2019 20:30:59

Standard Chartered deploys Kasisto chatbots to help customers

The world is gradually shifting to an automated and technology-driven global society. Most developed nations of the world, including China and USA, are investing in research and development projects focused at Artificial Intelligence (AI) and the ways it can influence education system, healthcare, business and financial infrastructure and other systems. AI is the replication of human intelligence processes by machines. Just like a human mind, a true AI system can learn on its own.

Globally, AI is increasingly being considered as important in banking as well as financial services sector leading to the addition of new technologies to the sector. JPMorgan Chase, the top commercial bank in the USA, is investing more than US$9.5 billion annually in technology and innovation. Besides JPMorgan, other American banks like Wells Fargo, Bank of America, CitiBank, US Bank, PNC Bank, Bank of NY Mellon as well as India's top four banks like State Bank of India, HDFC Bank, ICICI Bank and Axis Bank are working to integrate AI with their existing systems so as to improve customer services, reduce costs and improve efficiency.

Chatbots (artificial conversational entity) and conversational interfaces are now the trend as they can inspire enthusiasm and excitement in the banking world.

AI's role in the banking or financial sector more or less revolves around conversations between a human (customer) and a machine-learning agent or artificial assistant. Simply put, the user can chat with an artificial agent through facebook messenger or preferred chatting platforms.

JPMorgan Chase has recently introduced a platform named Contract Intelligence (COiN). This platform can manually review legal documents and contracts by using image recognition software. So, the manual process of analysing 12,000 commercial credit agreements that once took 360,000 hours, can now be completed in seconds thus saving time and efforts.

Similarly, Wells Fargo has developed a new AI platform that they are calling an "AI-driven chatbot through the Facebook Messenger". Bank of America also introduced an intelligent virtual assistant named Eric.

Due to such investments in AI, according to PwC (Pricewater house Coopers) FinTech Trends Report India) 2017, global investment in AI applications reached $5.1 billion from $4.0 billion in 2015.

In India, the State Bank of India (SBI) and HDFC Bank have developed AI-based chatbots for customers named SIA (SBI Intelligent Assistant) and EVA (Electronic Virtual Assistant) respectively.

AI is helping banking sector by providing digital support to customers, who can access these services through their smart phones and other devices. Such banking chatbots have been extremely effective at satisfying customers with required support and information and also bring in new clients for the banks through positive word-of-mouth. Banking chatbots like Kasisto AI (KAI), Personetics Assist, Finn AI, Clinc AI etc. are capable of conversing like a human being via text or voice messages. They can also extract and understand meaning of words or sentences being said or written to them.

AI can also play an important role in fraud detection and prevention. If programmed properly, AI can identify suspicious activities in transaction history and behaviour of individual customers and accountholders. If red flags are detected, then the system can immediately deny such suspicious transactions until they are verified by a human being.

AI also plays a vital role in risk management, marketing and support. AI or machine-learning algorithms can learn from their past actions and hence improve the quality of services. This is why the implementation and integration of AI in the banking sector is the demand of modern banking. Over the next five years, accountholders and customers of banks are going to see an improvement in the quality of conversation with chatbots as they will be able to answer more complex questions. Also, it will be possible for chatbots to converse in more languages other than English.

Recently, a commercial bank in Bangladesh has launched country's first AI-based banking chatbot. Anyone can interact with this chatbot through facebook messenger. It is a digitally interactive system that will respond to set questions from users regarding opening of accounts, credit cards and prepaid cards along with general service information through facebook messenger.

According to a report by the Chinese government think-tank, China Development Research Foundation, several companies in China's export-manufacturing provinces of Zhejiang, Jiangsu and Guangdong have cut 30-40 per cent of their workforce as a result of automation over the past three years. Such information can fuel the fear that application of AI in any sector will lead to lay-off of human employees from some areas. This may not be the case with AI in banking. Here, application of AI can make work convenient for the existing workforce.

In Bangladesh, AI can play an effective role in traffic monitoring and management system, national security system, healthcare system, manufacturing and service sectors.

The government of Bangladesh can learn from the steps being taken by governments and corporations in other countries to research and implement AI in different areas of life. AI's operational and analytical benefits can be integrated into the existing systems in a bid to manufacture goods and provide services which will be at par with international standards.

A.S.M. Ahsan Habib is a Principal Officer of Uttara Bank Ltd.

Rafiqul Islam is the Chief Operating Officer of Shimanto Bank.



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