Why 2018 Is the Year of AI for Financial Institutions
For most people, the term Artificial Intelligence (AI) conjures up science fiction scenarios as current as HBO’s popular Westworld series.
In the real world, to say the least, it’s not quite like that. In fact, a simpler way to look at modern AI is this: AI applications use learning algorithms to understand a user’s likes or dislikes through volume of usage. AI is already present in our lives, even if it doesn’t look like a Westworld-style robot. For example, Siri is designed to get used to your preferences, your day-to-day schedule and other everyday tasks based on identifying patterns and processing feedback. Even something like Amazon’s primary website features AI, as it learns your purchasing preferences and displays recommendations.
AI technology is making things faster and easier by cultivating data and providing customized output. In 2018, AI will become a bigger part of many industries, including the world of banks and credit unions, as the cost of AI becomes more accessible.
As AI gathers large amounts and various types of data, it crunches the numbers to make predictive decisions. This process is really about analysis to help identify and uncover information to help make better and more informed decisions, ranging from consumer behavior to better understanding internal operational resources. From a financial services perspective, 2018 will most likely see four trends regarding AI:
A major part of detecting fraud stems from unusual activity on an account. Currently, there are safeguards in place to determine if a transaction takes place a long physical distance from the cardholder’s residence or a high number of purchases occur in a small window of time. However, fraud can be perpetrated in many more subtle ways. Fraud teams are trained to spot these types of activities. AI can give these teams a tool to process data faster and more efficiently to detect fraud with increasing speed and accuracy. The credit union industry will be making use of AI for exactly this purpose.
AI represents the future of frontline customer service.
