The recent and widespread adoption of Artificial Intelligence in the mobile banking industry is due in large part to new advances in cloud computing and fast processing as well as the availability of easy-to-access open-source software. Artificial Intelligence has revolutionized banking in several key ways as it is beneficial both to banking customers and the banking sector itself.
AI Increases Engagement
Simply put, mobile banking apps are more engaging for those who use them. An engaged customer will always be willing to participate in more transactions and use more services than somebody who is not engaging as frequently with the platform.
Research proves that customers who use mobile banking apps will pay for more products and services at a financial institution than those who only visit their brick-and-mortar banks and make transactions in person.
A study by the ABA concluded that when users who have immediate access to their banking information are far more likely to make multiple transactions. This means that customers who routinely use mobile banking will actually generate more revenue for their bank.
On the flipside, this benefits customers as their banking information is available at their fingertips 24/7. Experts have been saying for years that Artificial Intelligence will transform banking practices and it’s becoming more and more clear with each passing quarter that this is the case.
Customer Analytics is Improving
Mobile apps allow banks to collect and analyze a great deal of actionable data, further allowing those institutions to improve their services and user experiences. This data can be leveraged by financial institutions to better understand the way their users are interacting with both the apps and current market trends.
Data points such as user engagement, customer satisfaction, and performance can then be traced and used to offer improved services. Metrics like session intervals, abandonment rate, churn rate, and retention are far more valuable to financial institutions than simply the number of customers who walked through a brick-and-mortar door.
These metrics allow banks to focus on entire user experiences which can help them better understand customer behaviour and what contemporary banking customers actually want.
The Rise of In-App and Push Notifications
In-app notifications as well as push notifications also offer a number of benefits to both banks and mobile app users alike. Notifications inform customers about new and relevant offers as well as discounts on services they already use or plan to use.
Push notifications help keep banking customers informed of credit limits and interest rates as they fluctuate in real time. Most importantly, this information can be relayed to them at any time — not just when they visit the bank physically or use an ATM.
AI Enhances Security
Of course, with any large-scale advancements in technology, security must also improve in tandem. For the modern bank (with the right mobile app design and the right set of rules), AI can be instrumental in keeping customers’ money and financial information safe and secure, particularly in fraud prevention and risk management.
The use of AI in the latest mobile banking applications can help detect fraudulent transactions and prevent suspicious, questionable, or illegal activity. By tracking the behaviour of individual customers in tracing their transaction history, AI can detect when banking behaviour is suspicious.
AI based software can analyze problematic transactions in real time, and based on data be learned from past behaviour and shut down potentially criminal activity.
Artificial intelligence can also help alleviate risk commonly associated with providing loans — for both the bank and the loan applicant. Traditional manual risk assessment processes typically rely on historical data which is not always an accurate way to determine risk.
Instead, AI can analyze real-time data and market conditions to generate a more accurate risk and credit assessment of the loan applicant. Banks can even analyze massive datasets to help them understand micro level activities, which can enable them to assess the behaviour of prospective loan holders and identify possible fraud before it even happens.
Whether you’re a banking executive or a client, you should be excited by the advances AI offers to the modern banking experience because it enhances the experience of banking while keeping a close eye out for suspicious behaviour.
Advances in Artificial Intelligence make banking a more secure, customer-focused experience — which promises to keep customers safer and more engaged as the technology continues to blossom.