Industries are now witnessing a huge upturn in productivity due to the revolution of Big Data. However, to handle it, businesses are required to integrate technologies that can help manipulate the use of data in efficient ways. Understanding what these critical success factors have caused many failures for financial institutions in the past, and it is these that allow for better outcomes to measure company success against.
Big Data and AI are continuing to transform the way banks interact with customers and how customers manage their finances. It is now a critical business asset, and innovations are being developed to meet the evolving demands of customers. When Big Data became a reality, none of the existing processes and technologies pre-AI were able to handle it. Now, thanks to AI technologies, strategies are being changed to provide banking with a boost in performance through streamlining of internal processes.
- Exploring this in further detail, let’s look at how Big Data and AI is changing banking for good, and for the better:
A Personalized Customer Experience – The banking industry must never take their eye off the ball in a period of transition to AI. One of the key critical success factors is to utilize AI to their advantage by ensuring exceptional personalized customer experiences. According to Deltec Bank, Bahamas – “AI can become more informative to the customer and adopt their technologies to identify trends and behavior patterns as part of smart insight capability with Big Data.” This can help banks to draw up personalized suggestions of banking products and or general services they use regularly. Ultimately, being personalized helps promote self-service and better help them manage their banking services.
- Fraud Detection And Prevention – Fraudulent activity through cyberattacks can setback banking institutions millions of dollars every year. By the time humans detect the unusual activity, the damage may have already been done. Banking institutions need to develop machine learning algorithms that can process and detect financial activities responsively to determine any unusual transactions. Through accuracy and intuition, this is incredibly convenient for customers who would receive on-demand notifications of any unusual activities to protect their security. As we sit today, newer algorithms are being developed to learn customer behavior and spending patterns to determine their legitimacy.
- Limiting Unexpected Charges – Banking customers have felt the need to open bank accounts that contain charges, leading to an overdraft. AI can mitigate this through the creation of intelligent decisions that can either efficiently communicate with customers about their limits, potentially provide solutions triggered when an account is in near overdraft, hold money in an account and alter customers over their limits so penalties aren’t necessary. This is something already acknowledged by Metro Bank where customers are in more control of how they spend their money, through alerts for payments and charges.
- Managing Financial Risk – The banking industry is always identifying a strategy to avoid risks. Big data helps to enhance the quality of risk management through the learning of certain scenarios where algorithms can determine if a particular transaction is deemed as a risk. Big data helps bankers to perform identification of risk through efficient data managing and processing.
With technology comes opportunities and new innovative areas. The big data boom is bringing several improvements within customer service. Deltec Bank, Bahamas says – “The banking industry is taking advantage of the revolution of big data. It is driving operational efficiency and productivity whilst helping to obtain better control of key strategic areas and success factors such as managing risk, managing fraud detection and prevention and ultimately delivering streamlined customer experience.” Combating these concerns with human elements costs money and the output may not always be right. The idea of machine learning technologies processing big data will help maintain accuracy and productivity, whilst continuing to predict customer behavior to drive personalization, which its effectiveness will only increase in years to come.
Disclaimer: The author of this text, Robin Trehan, has an undergraduate degree in economics, Masters in international business and finance and MBA in electronic business. Trehan is Senior VP at Deltec International www.deltecbank.com. The views, thoughts, and opinions expressed in this text are solely the views of the author, and not necessarily reflecting the views of Deltec International Group, its subsidiaries and/or employees.
About Deltec Bank
Headquartered in The Bahamas, Deltec is an independent financial services group that delivers bespoke solutions to meet clients’ unique needs. The Deltec group of companies includes Deltec Bank & Trust Limited, Deltec Fund Services Limited, and Deltec Investment Advisers Limited, Deltec Securities Ltd. and Long Cay Captive Management.