Exploring the Role of Artificial Intelligence in Digital Banking

From virtual assistants to fraud detection – AI plays a significant role in digital banking. It drives the creation of personalized customer experiences, improves sales, accelerates customer support, and improves productivity within financial institutions. So, how exactly does it help banks achieve these benefits? Let’s find it out.

The role of AI in digital banking

The Role of AI in Digital Banking and Customer Support

Firstly, let’s focus on customer support. In this case, AI tools are utilized to improve the experience of your clients by making their interactions with tellers and advisors faster, more personalized and more convenient. Why don’t we discuss this in more detail?

1. Making Customer Support Faster

Leading banks have set an ambitious goal – resolving most customer queries at first contact. Utilizing AI in digital banking helps with that, namely due to the use of generative AI-powered banking chatbots and virtual assistants.

These can process data quickly – both regarding the client and your initial banking procedures – and provide customers with accurate responses in a matter of seconds. This is especially true for simple queries, which can be resolved with little-to-no human input.

2. Personalization

A good AI system in digital banking can take personalization to the next level. For instance, our virtual assistant enables customer support agents to quickly adjust the tone of voice of their replies to the one used by the client, making them feel more comfortable.

Obviously, it’s just a single example – AI can tailor customer support even further, for instance, by analyzing previous chats and preparing responses based on previous interactions with the client.

3. Convenience

As AI speeds up customer support, it naturally makes it more convenient for the clients, for instance, by reducing the queues. It also makes customer support much more accessible on mobile devices, a channel that many customers prefer nowadays.

Boosting Sales in Digital Banking with AI

Artificial intelligence plays an important role in the sales as well. One of the most common challenges in traditional banking is finding the exact products that a customer will be willing to obtain, and AI makes it much easier.

Due to the use of deep learning and its data processing capabilities, artificial intelligence can spot patterns and extract insights from previous transactions or products, and aid the agents with intelligent product recommendations. As a result, personal banking becomes truly… personal, and customers are more likely to purchase financial products since they are better tailored to their needs.

Customer Acquisition with AI in Digital Banking

The role of artificial intelligence in digital banking is also visible in the customer acquisition process. When combined with biometrics, it can be used for eKYC and digital onboarding in banking, making the process less strenuous. 

This is especially important considering that about 68% of European consumers abandon onboarding [1] due to it being too difficult or complicated. With the use of AI, you can avoid such high abandonment rates, thus reducing the ROI on your customer acquisition efforts.

How AI Helps Reduce Operational Costs in Digital Banking

Artificial intelligence may also be leveraged to decrease the operational costs of a financial institution significantly. This is mainly due to its impact on customer support, though it doesn’t end purely there. Let’s analyze it more thoroughly.

1. Maximizing Productivity

Firstly, the use of virtual banking assistants makes it possible for your employees to focus on more valuable tasks and decreases the overall need for customer support agents. When combined with the omnichannel approach, it even enables your staff at physical branches to resolve queries online in between client visits, letting each of your employees generate more value for your institution.

2. Moving Banking Online

A proper, customer-centric AI-powered customer service will attract more customers to use online channels. This, on the other hand, translates into lower operational costs since you can reduce the number of your physical branches.

Surely, you will need to set up a digital contact center instead to meet the demand, but one central office to handle queries from all over the country is still a significantly less expensive solution than maintaining numerous branches visited only by a few clients per day.

Building a Secure Banking Environment with AI

Finally, AI may be utilized to improve security within your organization. With the use of deep learning, artificial-intelligence-based systems may be deployed to monitor transactions and evaluate client-related risks, ensuring that your institution is in line with the AML and KYC.

This not only helps you build a better image in the eyes of your customers but also lets you avoid fines for lack of compliance with the above mentioned procedures.

The Role of AI in Digital Banking: Conclusions

The role of AI in digital banking is substantial, and it shall rise with the development of new features and the improvement of the existing algorithms. As you can see, there are numerous benefits coming from implementing AI in your institution; therefore, it is wise to do so as quickly as possible.

Did you like this article? Then you should also read: Future Trends in Digital Banking: What to Expect


[1] https://www.signicat.com/the-battle-to-onboard-2022