Are your Operations Intelligent enough?

Artificial Intelligence-led solutions can benefit financial services organizations greatly. The enormous amounts of data captured by various systems within a financial institution can be utilized by AI-based systems to provide cognitive insights that were not possible earlier, particularly in the areas of cost reduction, fraud detection and enhancing customer satisfaction. The time is right for banks and other financial organizations to invest time and effort in artificial intelligence-led improvement in operations, business and customer experience.

There seems to be some ambiguity still, within banks and amongst operations leaders, as to the actual benefits of Artificial Intelligence or the tasks that it can automate. In simple terms, Artificial Intelligence is the technology that gives machines the ability to learn, reason and process information. It uses data to train algorithms to work the way a human would – based on cognitive reasoning. As operations become agile and huge amounts of data keep accumulating through daily operations, AI tools will become essential to make sense of this data. This will give Operations managers the ability to make sense of complex data, and the intelligence and speed for real time decision making.

According to a Deloitte report titled ‘Cognitive Intelligence to boost Digital Transformations in FSI’, most companies in the financial sector have already initiated their AI journey. Around 9 out 10 companies have already started working with AI, suggests this report. It goes on to predict that 65% of these financial companies believe that AI will have a significant impact on customer service, followed by impact on back office/operations (52%), financial advisors (42%), fraud detection (31%) and risk management (29%).

According to McKinsey, there is a second wave of automation and AI emerging in the next few years, in which machines will do up to 10 to 25 percent of work across bank functions, increasing capacity and freeing employees to focus on higher-value tasks and projects.

Artificial Intelligence provides many opportunities for banking operations leaders to use their growing data repositories to improve their bottom lines, ensure better compliance and fraud detection and improve customer experiences. Using artificial intelligence automation levers such as machine learning, natural language processing and cognitive computing, banks can find several instances where these concepts can be applied.

Let’s explore some of these aspects:

Compliance and Fraud detection: Operations related to regulatory compliance can benefit immensely from Artificial intelligence systems that provide the ability to process huge amount of data, document search or financial transaction scanning for signs of breaches. AI is also being used to screen for money laundering, market manipulation, insider trading, third-party risk, etc. It has the ability to identify frauds while they are taking place as well as predict the pattern of suspicious activity.

Lowering costs and increasing revenue through front end automation: One of the biggest opportunities of Artificial Intelligence lies in automating front end operations of the bank. AI gives banks the ability to engage with customers faster and in an intelligent way across channels, leading to a true omni-channel experience. Chatbots are increasingly finding acceptability in the world of financial operations and are able to resolve issues of ever increasing complexity. This, coupled with advances in Natural Language Processing (NLP) technologies have opened up a plethora of opportunities in areas such as customer-first response time and process automations such as e-KYC etc.

Improving the customer experience: Artificial Intelligence provides the tools for faster and better decision making for operations leaders by deriving deep and actionable insights (e.g. customer behavior patterns). It offers enormous potential for extracting information from unstructured data, especially the type of data that needs to be manually examined and is usually processed in back office operations. Technologies such as NLP can provide analysis that accurately understand the subtleties of language, the cultural context, tone etc. and can provide useful insights. This is particularly useful in carefully worded documents, transcripts, voice recordings and other sensitive content such as legal and compliance documents.

Operations leaders in banking institutions are beginning to realize that Artificial Intelligence-led solutions are executable as well as financially viable. It will be a while before the benefits are realized at scale, but it is no longer a matter of “if” but “how much” and “when”.

References

1. Cognitive Intelligence to boost Digital Transformations in FSI by Deloitte

https://www2.deloitte.com/content/dam/Deloitte/lu/Documents/technology/lu-cognitive-intelligence-to-boost-digital-transformations-fsi-112017.pdf

2. The transformative power of automation in banking by Mckinsey

https://www.mckinsey.com/industries/financial-services/our-insights/the-transformative-power-of-automation-in-banking

About the Author

Vikram Chandna is the Vice President of banking, financial services and insurance business in Latin America in Wipro and is also responsible for its top client globally. He has 20 years of experience in ITO with last 11 years in various leadership positions at Wipro. His experience spans enterprise sales and product management with deep understanding of IT Services including digital, artificial intelligence and cloud infrastructure services. His industry specialization is in banking and financial services.

Prior to his current role, Vikram was instrumental in shaping the largest client relationship for Wipro in the cloud infrastructure services space. He has led the Japan geography for infrastructure services and managed the end-user computing practice as well.

Prior to joining Wipro, Vikram held several senior level positions at OpSource (now part of Dimension Data) and Microland.

Vikram has done his post-graduation from Symbiosis, Pune and has undergone multiple leadership programs in Wipro. He has lived in India and Japan and now lives in New Jersey, USA.

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