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Why are Financial Institutions Paying Attention to AI?

October 5, 2022 By Zachary Lukasiewicz
  • Zachary Lukasiewicz
  • October 5, 2022

If you’ve been paying attention to the news, AI has been making headlines for quite some time now. The technology is being used in every industry, from medicine to finance. In fact, one of the biggest names in financial services—Charles Schwab—has even adopted broad use of artificial intelligence in its business operations. The question is: why are so many financial institutions excited about AI?

AI has arrived.

AI is a term that’s been used so much that it’s lost all meaning. 

AI stands for artificial intelligence, which is a technology that can be used to automate tasks normally done by humans. 

AI comes in many forms and flavors—it’s often called machine learning, data science or computer science—but at its core the concept of AI revolves around imitating intelligent human behavior. 

What is AI?

AI is a computer program that can learn to perform tasks and make decisions by itself.

It is an area of computer science that studies the design and development of intelligent agents: systems able to perform tasks in a way that humans consider to be intelligent, such as visual perception, speech recognition and decision-making.

AI can be used for many different things, such as playing chess or driving a car – but it can do so much more.

What is it used for in financial institutions?

Financial institutions are already making use of AI to solve a variety of problems, including:

  • Customer service: Chatbots and voice assistants can provide personalized interactions with customers. Customers can talk directly to their account manager and ask questions like, “What is my balance?” or “How much did I spend on groceries last month?”
  • Marketing: AI can be used to understand the spending habits of customers, allowing financial institutions to send relevant offers based on a customer’s purchasing history.
  • Productivity: Machine learning algorithms can automate repetitive tasks such as data entry or fraud detection. For example, when performing loan approvals for mortgage applicants, an application processing system could automatically check whether an applicant has been affected by debt collection laws over time; if so, then it could require additional documentation before moving forward with the application process.


How can businesses use it?

Financial institutions are using AI to improve customer service, marketing automation and sales automation.

For example, let’s say you’re a bank with a large number of customers who need loans. 

By using AI to analyze past loan applications, you can identify common mistakes among those who were denied loans or paid higher interest rates than necessary. 

You could then use that information to train your employees on how to avoid the same mistakes in future applications.

This same type of analysis can be used for marketing campaigns as well. 

If you want more customers in your store during certain times of the day/week/year—but not at others—you can use AI to gather data about where they’re coming from (which may not be immediately apparent) and plan accordingly.

From instant customer service to marketing automation, AI makes everything easier and more efficient.

AI is being used to help businesses solve a wide range of problems. 

For example, AI can improve customer service by automating repetitive tasks and identifying patterns that humans would miss. 

AI also makes marketing easier: it’s now possible to identify potential customers based on what they do online or in their inboxes, rather than relying on old-fashioned information like name and address lists.

AI can also help businesses detect fraud by collecting more data than human employees could ever hope to monitor themselves—and then analyzing it in real time for suspicious activity. 

Finally, with machine learning algorithms able to analyze massive amounts of data more quickly than any human could, AI makes it possible for companies of all sizes to perform complex analyses on their own systems’ performance metrics (such as how many customers are opening an email campaign).

Artificial intelligence is here, and it’s here to stay. 

While many people have concerns about the impact that AI will have on society, there’s no doubt that it will continue to grow and evolve in the coming years. 

Businesses can take advantage of this technology by using it to automate routine tasks and provide customers with instant access to information when they need it most.

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