Artificial intelligence-application in the field of Indian banking sector

Abstract

In this paper, the focus is to study the emerging technologies adopted by the banks in private sector and public sector in order to increase their market share. All the banks in a bid to improve their revenues have started investing in AI through better customer engagement. The key focus of the banks is also to ensure compliance and proactively detecting and preventing the frauds. AI based Anti-money laundering applications are the solutions for the same. AI has also helped banks to explore the customer preferences and also serve their issues in real time. Besides customer service and operational costs, the banks have started using AI in risk management. Risk Management for banks includes compliance to Anti-Money laundering measures as specified by Reserve Bank of India and other regulatory bodies from time to time. The initiatives taken by the banks in the adoption of AI has been discussed in this paper. Anti-money laundering applications are programmed with a set of rules, process, laws and regulation helping the financial institutions to detect income from illegal sources. The banks have also benefited from AI enabled Chabot support system which responds to the identified query with most suitable reply. The paper also discusses about the challenges in the implementation of AI which includes unwillingness to switch to new methods, up skilling of the workforce. Artificial Intelligence is a new normal for most of the industries. Financial industry is no exception. With the help of advanced technology, banks and non-banking finance companies have been able to lower their operational costs and surpass the customer expectations.