How to Leverage Artificial Intelligence in Digital Transformation, Veejay Jadhaw

Artificial Intelligence (A.I), as high-tech as it may sound, has actually been around for more than 60 years. Alan Turing first mentioned it in his paper “Computing Machinery and Intelligence” where he suggested considering the question ‘can machines think?’. Artificial Intelligence or A.I, put out simply, is the development of computer systems to make them perform tasks that usually require human intelligence. This involves tasks like speech recognition, visual perception, and decision making among others.

“According to   Accenture Research the impact of AI in 12 developed economies reveals that AI could double annual economic growth rates in 2035 by changing the nature of work and creating a new relationship between man and machine. The impact of AI technologies on business is projected to increase labor productivity by up to 40 percent and enable people to make more efficient use of their time.”

A mix of computing power, advancement of machine, deep learning & analytics, (“proliferation of cloud by Veejay Jadhaw”), can help to accelerate and advance digitization through the application of Artificial Intelligence (AI).   

Artificial intelligence can help banks’ many functions, including,  (“core system & operations modernization by Veejay Jadhaw”), contact centers, (“payments modernization by Veejay Jadhaw”), lending, and finance teams by modernizing their operating models and processes. 

Artificial intelligence is an umbrella of related technologies , including natural language processing (improving  interactions between computers and human or “natural” languages); machine learning (computer programs that can “learn” when exposed to new data) and expert systems (software programmed to provide advice) – that help machines analyze and actions in ways similar to the humans.  These technologies are behind innovations such as virtual agents, identity analytics, and recommendation systems which have already transformed the ways in which companies look at the overall customer experience across various industries.

Artificial Intelligence (AI)  in Financial Services:

AI and Payments.

There are many definitions that people use, but the one that seems to resonate best with how AI technologies are used in the payments industry speaks to the ability of algorithms to learn and adjust based upon changes across the payments ecosystem. This is possible, in part, because of the feedback loop inherent in payments. Bad transactions at the issuer level are reported back to the network, as specified by the operating rules, where they can feed the risk scoring algorithms. Bad transactions at the merchant level, for example, get reported back to the merchant in the form of chargebacks.

Personalized lending solutions

The ‘fuel’ for effective AI is data. As more data on businesses and entrepreneurs is deployed towards online lending platforms, it can producing more personalized business loan offers through automation.

Finance and Operation

Banks process large volumes of data to satisfy regulatory and compliance requirements.  These processes are increasingly formulaic, but required large numbers of people performing repetitive task (example reconciliation and consolidation), making them candidates for robotic process automation (RPA).  The software “bots” used in RPA can be coded to with rules to perform this tasks, and by  adding the layer of machine learning for more complex and dynamic task can make the combination of RPA and AI powerful.

During the journey of digital transformation, AI has a potential to transform the most central functions in finance such as intercompany reconciliations and the quarterly “close” and reporting of earnings, as well as engage in the more strategic functions such as financial analysis, asset allocation and forecasting.  AI provides speed and accuracy – the entire reporting and disclosure process, for example, can be undertaken in real time.  Rather than waiting until the end of the quarter, the finance team empowered by AI can identify issues and make adjustments much sooner than is possible today, increasing accuracy and eliminating period end efforts."

Artificial intelligence is no longer an abstract concept. As banks execute on their digital transformation journey, it is imperative of banks to think beyond just mobile, and develop strategies to extend their digital transformation by leveraging the power of Artificial Intelligence to streamline & automate some of their most fundamental financial processes. 

Bibliography:

Forbes, Feb 2017

PaymentsView, 2016

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