Analyzing the use of AI in the banking system by the SWOT model

Analyzing the use of AI in the banking system by the SWOT model A Strengths AI will enable the creation of openness for banks by supporting the creation of analytical and data processing capabilities according to a platform based operating mechanism, allowing the bank to operate effectively as a platform ) Allows to modularize transaction nodes, form open platform APIs (Application Programming Interface) Application programming interface, development of microservices This enables efficient explo.

Analyzing the use of AI in the banking system by the SWOT model A.Strengths  AI will enable the creation of openness for banks by supporting the creation of analytical and data processing capabilities according to a platform-based operating mechanism, allowing the bank to operate effectively as a platform ) Allows to modularize transaction nodes, form open platform APIs (Application Programming Interface) - Application programming interface, development of microservices This enables efficient exploitation of the data capitalization generated from bank transactions Vietnamese commercial banks have realized the potential, challenges as well as urgent need to meet the requirements of the open banking ecosystem  AI will help banks improve learning through and deep learning, develop smart algorithms and smart transactions This will help reduce the risk of transactions, increase the efficiency of data mining, and expand transaction-related operational capabilities In the trial period, MB officially became the first Vietnamese commercial bank to join the Contour Network and offer blockchain-enabled L/C services to corporations MB's L/C (letter-to-credit) services allow a secure process of delivering L/C services, from issuance to document presentation, to take place on a single unified platform  AI will help the bank automate through optimized processes by automating processes, automating operations, and optimizing digital processes  AI will help banks develop solutions that enhance and scale digital architectures This will help improve the data capitalization of the transactions that the bank can make We have reduced costs to store and process data, increased access and connectivity for all, and rapid advances in AI technology Especially in the complicated pandemic situation, the demand for customers to come directly to banks for transactions has decreased significantly but instead is the support of online banking apps Long waits for support at banks are also annoying, and the emergence of AI virtual financial assistants has significantly improved the quality of customer experience B Weaknesses Highly expensive Production and maintenance of artificial intelligence demand huge costs since they are very complex machines like advanced software programs which require regular updates to meet the needs of the changing environment ) Bad Calls Though Artificial Intelligence can learn and improve, it still can’t make judgment calls Humans can take individual circumstances and judgment calls into account when making decisions, something that AI might never be able to Replacing adaptive human behavior with AI may cause irrational behavior within ecosystems of humans and things Distribution of Power There is a constant fear of AI superseding or taking over humans Artificial intelligence can give a lot of power to the few individuals who are controlling it -> AI carries the risk and takes control away from humans while dehumanizing actions in several ways Unemployment The replacement of the workforce with machines can lead to wide-reaching unemployment Moreover, if the use of AI becomes rampant, people will be highly dependent on the machines and lose their creative power C Opportunities Enhanced Customer Experience The customer being the key driver of a service industry, customer service is at the forefront of any business AI can be used to derive a better understanding of customers spending patterns, which will help banks customize products by adding personalized features This supplements meaningful customer engagement, building strong relationships, and growth of business for the bank Use Of Chatbots Customer satisfaction is also enhanced as they can avail of the service in the comfort of their homes without having to visit branches —saving their time Chatbots can be enhanced in the future to announce new offers to the customer like loans, alert customers if they have any EMI payments due, suggest good discounts based on the tie-ups the bank has with e-commerce sites, etc Machine Learning and Cognition can be used to identify suspicious data patterns and convince banks if the actual source of money is legal or illegal AI can also study past consumer behavior to predict future requirements, which helps banks to up-sell and cross-sell successfully Wealth Management And Portfolio Management  AI-based systems help potential investors by analyzing their salary and spending patterns They can also predict market trends and choose the right funds for their portfolio by determining the adequate sum of money they should invest every month in realizing their dreams All this can be done without visiting branches or hiring experts In the world of ‘Banking at your fingertips’, mutual funds, fixed deposits can be created at home, and the money is redeemed when necessary  AI technologies enable banks to bring more efficiency to their operations and manage costs They can also help manage contracts and act as brokers, simultaneously taking over routine tasks, thus improving productivity and efficiency All this transforms into increased revenue, reduced costs, and a boost in profits Intelligent Character Recognition System This system has been used by some foreign banks to recognize, extract important information from old loan applications, lease agreements and feed it to a central database that can be accessed by everyone D Challenges Governance Structures and Regulations: Implementation of any new technology can be at odds with the highly regulated banking and financial services industry Risk and compliance teams may struggle to understand the potential vulnerabilities or create appropriate internal regulations Without the right governance, the deployed AI solution may result in unintended consequences such as access denied to financial products or privacy breaches Lack of Clear Strategy: In a constantly evolving technological environment, amid high costs for new infrastructure and human capital, executives may fail to fully embrace AI technology If that happens, it will be difficult to implement a successful organization-wide strategy to effectively utilize the AI technological capabilities Many banks face the challenge of an unwillingness to improve or adapt to new methods Standardized with set practices in conventional ways, some locations in tier two and three cities across the country face this challenge These units also lack the level of commitment required to upskill their labour force and human resources skills With the lack of supporting data to implement operational changes, the banking sector is facing a disconnect between the need and response from customers The banks adapt to a switch that fails to comply with the actual requirement of the masses Banks with upscaling use of artificial intelligence need to keep up with the regulatory standards of government The increasing services like net-banking and online transactions come under the ambit of privacy regulation policies as well, which necessitates compliance from the bank’s end V Current situation of AI in the banking system Current situation  AI in banking is maturing, bringing the potential for higher-complexity solutions that generate positive ROI across business segments  Most banks (80%) are highly aware of the potential benefits presented by AI and machine learning, per an OpenText survey of financial services professionals In fact, many banks are planning to deploy solutions enabled by AI: 75% of respondents at banks with over $100 billion in assets say they're currently implementing AI strategies, compared with 46% at banks with less than $100 billion in assets, per a UBS Evidence Lab report seen by Insider Intelligence Certain AI use cases have already gained prominence across banks' operations, with chatbots in the front office and anti-payments fraud in the middle office the most mature Banks can use AI to transform the customer experience by enabling frictionless, 24/7 customer service interactions — but AI in banking applications isn't just limited to retail banking services The back and middle offices of investment banking and all other financial services for that matter could also benefit from AI  AI application in the world In June 2018, BofA released Erica, an AI-powered virtual assistant that uses natural language processing (NLP) to understand and respond to customer queries In addition, Erica also leverages a constellation of predictive analytics, machine learning and AI to: Warn customers if their spending habits are likely to bring their balance to zero one week in advance Notify customers if their credit score changes as a FICO scoring system tool is embedded within the app Reminding customers of recurring or late payments Search for account information and past transactions on request Using anomaly detection software, flagging payments when they are more expensive than expected Lock/unlock credit and debit cards at the customer’s request By applying advanced analytics to historical purchase data, advise customers on how to reduce monthly spending Over the past years Erica’s popularity has skyrocketed In Q1 of 2021, 19.5 million BofA customers used Erica, a significant increase from the 6.3 million users recorded in Q1 of 2019 In addition, over the course of 2020, clients interacted with Erica approximately 400,000 times a day, up almost 100% year over year Though Erica was already experiencing steady growth before the pandemic, especially amongst millennials and Gen Z users, about million people used Erica for the first time in 2020 In fact, as many physical locations were forced to close, the bank taught Erica more than 60,000 phrases and questions related to the Coronavirus to help field questions on the subject  AI application in Vietnam On February 4, FPT Smart Cloud and SeABank officially signed a strategic cooperation agreement in the fields of artificial intelligence and cloud computing Accordingly, SeABank will put into operation the virtual assistant FPT.AI switchboard FPT.AI is promised to provide customers with service experiences that "don't stop at a quick level, but must be instant" At SeABank, FPT.AI helps the bank optimize operations, especially at peak times, automate processes, and focus human resources on more complex and important tasks Besides, the solution allows customers to experience outstanding services such as consulting and answering questions in the shortest time, 24/7 The FPT.AI assistant deployed at SeABank will perform two automatic operations: card renewal and passbook and reminding customers of payment schedules FPT AI virtual assistant is a solution that allows automatic conversations through the switchboard channel, including making outgoing calls and receiving incoming calls, or intelligently forwarding calls in a friendly way, natural and seamless FPT.AI's virtual assistant is capable of handling thousands of conversations at the same time with high accuracy and uniformity In 2020, the virtual assistant FPT.AI switchboard has been applied by Home Credit Vietnam to the call center service, serving the needs of hundreds of thousands of customers automatically, from handling inquiries, pay attention to the payment schedule After months of operation, the solution helped Home Credit Vietnam achieve initial successes such as automatically conducting million conversations with customers, with a duration of each conversation ranging from to minutes and increasing 40% of the operating efficiency of this financial company As a strategic solution of FPT, FPT.AI is a comprehensive AI platform, aiming to breakthrough business performance, effectively engage customers with automated customer care processes, and open up opportunities to create value new value for businesses in the future through the application of the most advanced machine learning and deep learning technologies in the field of AI FPT.AI currently owns AI technology solutions including: Intelligent conversation platform, recognizing and extracting content from text captures, automatic text-to-speech, virtual assistant switchboard, electronic customer identification VI, Trend of AI in banking system Almost every facet of life nowadays is aided by technology The use of artificial intelligence in banking is moving from a leading-edge option to a core capability Customer Service Customer service is regarded as the public face of every company When a customer has a pleasant experience interacting with a company, it is considered successful When you visit the bank, you will speak with a customer service representative about your concerns Account information, transaction history, check clearance, and the opening of a new bank account are all things you should question about If the queue is large, there may be long waiting chores to meet a CSR Artificial intelligence is currently being used by many investment institutions to speed up this time-consuming and repetitive activity Internet and Mobile banking People are abandoning personal computers in favor of cell phones, which have grown in popularity Mobile phones have become the exclusive means of communication, planning, reading, lifestyle management, and financial planning For customer service and banking processes, banks now require more complex AI software AI for Capital markets A capital market is a place where traders can make money by investing in bonds, stocks, and other long-term projects Formerly, capital markets only went to places where large guns were present With the advancement of technology, even a low-income individual can now participate in financial markets In other terms, capital markets are not becoming more decentralized, and everyone, even from home, can engage Wealth Management Today, wealth managers are gradually putting together crucial AI scenarios to meet the banking needs of high-net-worth individuals AI assists various wealth management businesses in performing critical banking tasks efficiently They can gain more experience with wealth management responsibilities, making customers more comfortable AI for Compliance in Banking Compliance is a set of rules that certain banks must follow, with some exceptions Because these rules are critical for keeping processes up to date and avoiding any risks or losses Without a compliance regulation, the baking industry faces severe difficulties, including the loss of licenses Bank officials can alter the compliance regulations to meet the needs of their particular banking industry Various regulatory compliance is growing with wealth management The GDPR or MiFID II are two examples of financial advising services Risk Management For risk management in the market, AI is a great flux Many frauds and dangers in the banking sector can be detected using AI technologies and software To assess and arrange unstructured statistics, artificial intelligence (AI) and risk management are required Risk managers in finance are concerned with losses and risks, and they use AI techniques to try to control them Artificial intelligence is becoming an increasingly important part of financial and corporate growth Machine learning allows for the monitoring and evaluation of unstructured data, which saves both money and time These also aid in mitigating and compensating for various hazards by regulating and minimizing them Records Maintenance In the banking industry, AI software is used to maintain records Because it is critical to retain the client’s information or data in a secure format As a result, a fantastic piece of software Good or excellent scanned images of the documents are generated using optical character recognition By altering the forms and all of the characters in the papers, OCR converts the paper records into a digital display This can transform official bank documents into a one-of-a-kind format Accounting Accounting aids in the conversion of data into a more precise format Traditional computing technologies are slow, and they cost more money and time However, AI software now improves accuracy and bookkeeping capabilities, making them simple and dependable Accounting may be aided by AI by using business planning, simplifying statistics, and conducting investigations Human Resources The human resource department is in charge of job postings, production, and upkeep In the past, HR had to deal with significant difficulties in keeping the entire process running smoothly However, with the introduction of new AI technologies, everything is now controllable and manageable Banking officials can use AI to create HR methods for handling their work and gaining greater benefits It aids in increasing the bank staff’s total output by increasing their participation and interaction Artificial intelligence has the potential to increase average profits and give workers more power REFERENCES Bouargane, A (2022, 11) AI IN BANKING - HOW CAN BANKS MEET THE AI CHALLENGES? Retrieved from BBN TIMES: https://www.bbntimes.com/financial/ai-in-banking-how-can-banks-meet-the-aichallenges Vadapalli, P (2021, 2) Artificial Intelligence in Banking 2022: Examples & Challenges.Retrieved from upGrad: https://www.upgrad.com/blog/artificialintelligence-in-banking/ PROS AND CONS OF ARTIFICIAL INTELLIGENCE (AI) IN BANKING Posted by Gaurav Prabhakar Mali | Nov 8, 2018 | Technology https://www.smallbusinessbonfire.com/artificial-intelligencebanking/#:~:text=Highly%20Expensive,needs%20of%20the%20changing %20environment  ... These also aid in mitigating and compensating for various hazards by regulating and minimizing them Records Maintenance In the banking industry, AI software is used to maintain records Because it... new AI technologies, everything is now controllable and manageable Banking officials can use AI to create HR methods for handling their work and gaining greater benefits It aids in increasing the. .. which necessitates compliance from the bank’s end V Current situation of AI in the banking system Current situation  AI in banking is maturing, bringing the potential for higher-complexity