scholarly journals Artificial Intelligence in the Banking Sector – A Critical Analysis

2021 ◽  
Vol 8 (S1-Feb) ◽  
pp. 210-216
Author(s):  
Joel Manjaly ◽  
Ranjana Mary Varghese ◽  
Philip Varughese
Keyword(s):  
Artificial Intelligence ◽  
Financial Institutions ◽  
Financial Services ◽  
Banking Sector ◽  
Regulatory Constraints ◽  
Public Company ◽  
Global Banking ◽  
Improve Compliance ◽  
Potential Benefits ◽  
Digital Disruption

“Computers will overtake humans with AI in the next 100 years. When that happens, we need to make sure the computers have goals aligned with ours.” The pros and cons of AI is evident in this statement made by Stephen Hawking.The last decade had witnessed tremendous changes in how each industry functions. The rapid growth of technology, internet and infrastructure has fuelled this disruption at a 10X speed.Talk of the town in digital disruption is Artificial Intelligence. Number of mentions of AI or Machine Learning in earning calls by public company executives shows an exponentially rising trend since 2015 as per the data by CBInsights. AI has brought in groundbreaking changes in the global banking industry. The future of AI in banking is enormous as the power of advanced data analytics can combat fraudulent bank transactions and improve compliance. AI technologies reduce costs in the banking sector by increasing productivity. According to Open Text survey of financial services professionals, 80% of banks are highly aware about the potential benefits that AI can bring to the business. What are the potential benefits of AI in financial institutions? Does adopting AI come with risks and costs? What are the regulatory constraints which could be the impediments for implementing AI in the Banking sector? This conceptual paper deals with risks, rewards, use cases and ways to adopt AI in the banking sector. This article also tries to identify the paybacks and also the key uses of some of the tools which are used by both financial institutions and central banks. It also indicates the main constraints of the technology and its likely consequences for the correct functioning of the financial system.

Artificial intelligence impact on banks clients and employees in an Asian developing country

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nada Mallah Boustani
Keyword(s):  
Artificial Intelligence ◽  
Developing Country ◽  
Social Services ◽  
Financial Institutions ◽  
Financial Services ◽  
Banking Sector ◽  
Data Entry ◽  
Economic Behavior ◽  
Network Systems ◽  
Content Type

Purpose The purpose of this paper is to discuss the application of artificial intelligence (AI) in banking sector, its impact on banks employees and consumer behavior alike when buying financial services and the importance of (AI) for delivering social services in a western Asian developing country: Lebanon. The author tried to respond to the following problematics: Would AI be able to replace man power in customer service? and would AI change the job of the banker and render the bank more profitable? Design/methodology/approach The data collected and analyzed was used in a quantitative research-based models with the application of hypothesis regression models. The results obtained has helped despite the fact of its innovative framework, AI cannot replace the role of humans when it comes to client’s interactions with banks employees. Findings AI elevates the quality of banking transactions to an upper edge. Some of the technical banking jobs might be in jeopardy with AI, as the technology can be easily replaced with human resources, but when emotional intelligence is required for banks clients/employee’s relationship management, AI has been found with no ability to supersede. Research limitations/implications Researchers in the future can also compare large banks called alpha banks to smaller banks in the same developing country to further test the possibility of adopting innovation and change through AI in different sizes of banks with larger number of employees, financial resources and corporate clients. Practical implications Fears regarding impact on employment were detected, AI could render many banks’ jobs obsolete in the coming years, asserting that AI and robotics “reduce the need for staff in roles such as back office functions. Data suggests that the proliferation of AI could be accompanied by a rise in banking jobs. It may also be the case that only the most mundane jobs such as data entry will be sacrificed for machine superiority. While a rise in job numbers associated with higher AI-adoption rates seems ideal, some evidence suggests that most financial institutions are not yet fully confident in how to effectively apply the technology for the best results but at the same time seemed to be receptive to using AI and machine learning in their organization. Social implications This study was conducted and limited to one developing Asian country, it would be useful to stretch this study covering other countries in the region to dive into more diversified results that could trigger researchers to compare more the adoption of AI in Asian countries and evaluating its impact with respect to different countries size and/or level of development in addition to other demographics and criteria. Originality/value Financial institutions are increasingly using artificial neural network systems to detect fraud and charges that do not meet the standard. The AI is used to: organize transactions; keep accounts; invest in stocks; optimize portfolios, etc. Reducing the number of frauds and financial crimes in Lebanon by monitoring user behavior to detect abnormal changes or anomalies in addition to the possible rectification of human economic behavior in the Asian region, this could add a great value and high originality to the research.

COVID -19 and Indian Financial Markets: A Review

2020 ◽  
Vol 16 (02) ◽  
pp. 1-8
Author(s):  
Kamaldeep Kaur Sarna
Keyword(s):  
Financial Markets ◽  
Financial Institutions ◽  
Financial Services ◽  
Stock Markets ◽  
Global Economy ◽  
Banking Sector ◽  
Global Financial Crisis ◽  
Negative Impact ◽  
Management Strategies ◽  
The Impact

COVID-19 is aptly stated as a Black Swan event that has stifled the global economy. As coronavirus wreaked havoc, Gross Domestic Product (GDP) contracted globally, unemployment rate soared high, and economic recovery still seems a far-fetched dream. Most importantly, the pandemic has set up turbulence in the global financial markets and resulted in heightened risk elements (market risk, credit risk, bank runs etc.) across the globe. Such uncertainty and volatility has not been witnessed since the Global Financial Crisis of 2008. The spread of COVID-19 has largely eroded investors’ confidence as the stock markets neared lifetimes lows, bad loans spiked and investment values degraded. Due to this, many turned their backs on the risk-reward trade off and carted their money towards traditionally safer investments like gold. While the banking sector remains particularly vulnerable, central banks have provided extensive loan moratoriums and interest waivers. Overall, COVID-19 resulted in a short term negative impact on the financial markets in India, though it is making a way towards V-shaped recovery. In this context, the present paper attempts to identify and evaluate the impact of the pandemic on the financial markets in India. Relying on rich literature and live illustrations, the influence of COVID-19 is studied on the stock markets, banking and financial institutions, private equities, and debt funds. The paper covers several recommendations so as to bring stability in the financial markets. The suggestions include, but are not limited to, methods to regularly monitor results, establishing a robust mechanism for risk management, strategies to reduce Non-Performing Assets, continuous assessment of stress and crisis readiness of the financial institutions etc. The paper also emphasizes on enhancing the role of technology (Artificial Intelligence and Virtual/Augmented Reality) in the financial services sector to optimize the outcomes and set the path towards recovery.

FIFA – highlighting the links between global banking and international money laundering

2018 ◽  
Vol 21 (4) ◽  
pp. 498-512 ◽  
Author(s):  
Mohammed Ahmad Naheem
Keyword(s):  
Money Laundering ◽  
Financial Services ◽  
Banking Sector ◽  
Due Diligence ◽  
Content Type ◽  
Services Sector ◽  
Financial Services Sector ◽  
Global Banking ◽  
Beneficial Ownership ◽  
The Impact

PurposeThis paper uses the recent (August 2015) FIFA arrests to provide an example of how illicit financial flows are occurring through the formal banking and financial services sector. The purpose of this paper is to explore which elements of anti-money laundering (AML) compliance need to be addressed to strengthen the banking response and reduce the impact of IFFs within the banking sector.Design/methodology/approachThe paper is based on the indictment document currently prepared for the FIFA arrests and the District Court case of Chuck Blazer the FIFA Whistleblower. It uses the banking examples identified in the indictment as typologies of money laundering and wire fraud. Corresponding industry reports on AML compliance are included to determine where the major weaknesses and gaps are across the financial service.FindingsThe main findings from the analysis are that banks still have weak areas within AML compliance. Even recognised red flag areas such as off shore havens, large wire transfers and front companies are still being used. The largest gaps still appear to be due diligence and beneficial ownership information.Research limitations/implicationsThe research topic is very new and emerging topic; therefore, analysis papers and other academic writing on this topic are limited.Practical implicationsThe research paper has identified a number of implications for the banking sector, addressing AML deficiencies, especially the need to consider the source of funds and the need for further enhanced due diligence systems for politically exposed and influential people and the importance of beneficial ownership information.Social implicationsThis paper has implications for the international development and the global banking sector. It will also influence approaches to AML regulation, risk assessment and audit within the broader financial services sector.Originality/valueThe originality of this paper is the link between the emerging issues associated with allegations of bribery and corruption within FIFA and the illicit financial flow implications across the banking sector.

scholarly journals Early Adopters to Early Majority - What's Driving the Artificial Intelligence and Machine Learning Powered Transformation in Financial Services?

2021 ◽  
Vol 12 (4) ◽  
pp. 43
Author(s):  
Srikrishna Chintalapati
Keyword(s):  
Artificial Intelligence ◽  
Machine Learning ◽  
Portfolio Management ◽  
Value Chain ◽  
Financial Services ◽  
Retail Banking ◽  
Early Adopters ◽  
Customer Life Cycle ◽  
Digital Disruption ◽  
The Impact

From retail banking to corporate banking, from property and casualty to personal lines, and from portfolio management to trade processing, the next wave of digital disruption in financial services has been unleashed by the concepts and applications of Artificial Intelligence (AI) and Machine Learning (ML). Together, AI and ML are undoubtedly creating one of the largest technological transformations the world has ever witnessed. Within the advanced streams of research in AI and ML, human intelligence blended with the cognitive reasoning of machines is finally out of the labs and into real-time applications. The Financial Services sector is one of the early adopters of this revolution and arguably much ahead of its leverage compared to other sectors. Built on the conceptual foundations of Innovation diffusion, and a contemporary perspective of enterprise customer life-cycle journey across the AI-value chain defined by McKinsey Global Institute (2017), the current study attempts to highlight the features and use-cases of early-adopters of this transformation. With the theoretical underpinning of technology adoption lifecycle, this paper is an earnest attempt to comment on how AI and ML have been significantly transforming the Financial Services market space from the lens of a domain practitioner. The findings of this study would be of particular relevance to the subject matter experts, Industry analysts, academicians, and researchers focussed on studying the impact of AI and ML in the financial services industry.

When Technology Meets Finance

2021 ◽  
pp. 1-21
Author(s):  
Yousif Abdullatif Albastaki
Keyword(s):  
Artificial Intelligence ◽  
Financial Institutions ◽  
Financial Services ◽  
Major Part ◽  
The Internet ◽  
Financial Industry ◽  
Digital Innovation ◽  
Customer Expectations ◽  
The Internet Of Things

There is a paradigm shift in the financial services industry. Combined with ever-changing customer expectations and preferences, emerging technologies such as artificial intelligence (AI), machine learning, the internet of things (IoT), and blockchain are redefining how financial institutions deliver services. It is an enormous task to remain competitive in this ever-changing environment. Financial institutions see FinTech as a major part of the digital future, and as proof of this, since 2015, financial institutions have invested over US$ 27 billion in FinTech and digital innovation. This chapter is an introductory chapter that explores FinTech in the literature. It focuses on how FinTech is reshaping the financial industry by describing FinTech phases and development process. The financial products and services using FinTech are also described with a highlight on Islamic FinTech. The chapter finally concludes by describing the future of FinTech.

Exploring the Possibilities of Artificial Intelligence and Big Data Techniques to Enhance Gamified Financial Services

2022 ◽  
pp. 187-204
Author(s):  
María A. Pérez-Juárez ◽  
Javier M. Aguiar-Pérez ◽  
Miguel Alonso-Felipe ◽  
Javier Del-Pozo-Velázquez ◽  
Saúl Rozada-Raneros ◽  
...  
Keyword(s):  
Artificial Intelligence ◽  
Big Data ◽  
Financial Institutions ◽  
Financial Services ◽  
Essential Role ◽  
Digital Natives ◽  
Digital Immigrants ◽  
Artificial Intelligence Techniques ◽  
New Challenges

A lot of millennials have been educated in gamified schools where they played Kahoot several times per week, and where applications like Classcraft made them feel like the protagonists of a videogame in which they had to accumulate points to be able to level up. All those that were educated in a gamified environment feel it is natural and logical that gamification is used in all areas. For this reason, gamification is increasingly becoming important in different fields including financial services, bringing new challenges. Gamification allows financial institutions to provide personalized and compelling experiences. Big data and artificial intelligence techniques are called to play an essential role in the gamification of financial services. This chapter aims to explore the possibilities of using artificial intelligence and big data techniques to support gamified financial services which are essential for digital natives but also increasingly important for digital immigrants.

The Rise and Application of Artificial Intelligence in Healthcare

2021 ◽  
pp. 28-49
Author(s):  
Ivan Khoo Yi ◽  
Andrew Fang Hao Sen
Keyword(s):  
Artificial Intelligence ◽  
Financial Institutions ◽  
Molecular Level ◽  
Healthcare Providers ◽  
Pharmaceutical Companies ◽  
Healthcare Industry ◽  
Practice Of Medicine ◽  
Potential Benefits ◽  
Legal Professional ◽  
Medical Domain

The overall purpose of this chapter will be to broadly explore both the existing and possible implementations of artificial intelligence (AI) in healthcare. The scope of this chapter will be explored from the unique perspectives of various stakeholders in the healthcare industry, namely the healthcare providers, patients, pharmaceutical companies, healthcare financial institutions, and policymakers. The chapter will seek to identify the potential benefits and pitfalls that faced by these stakeholders in implementing the use of AI, from the molecular level to a macroeconomics level; as well as seeking to understand the legal, professional, and ethical boundaries of the medical domain that are challenged as AI increasingly becomes irreversibly intertwined with the practice of medicine.

Artificial Intelligence and Personalized Banking

2022 ◽  
pp. 74-87
Author(s):  
Sunanda Vincent Jaiwant
Keyword(s):  
Artificial Intelligence ◽  
Customer Service ◽  
Financial Services ◽  
Banking Sector ◽  
Banking Industry ◽  
Human Intelligence ◽  
Financial Services Industry ◽  
Customer Journey ◽  
Services Industry ◽  
Applications Of Ai

AI has begun making its presence felt in every industry and now across the financial services industry as well. This chapter examines and presents the use of AI in banks for better customer service giving them a personalized experience. This chapter explains how banks are getting future-ready for their financial services by means of AI and are delivering financial offerings seamlessly. This research primarily focuses on the concept of AI in the field of banking, how AI has revolutionized personalized banking and made banking operations more efficient and successful. AI innovations are an integral part of Industry 5.0 which aims at integrating automation and human intelligence. This chapter aims to study and describe the current applications of AI in the banking industry and its impact on the banking sector. The study also gives a description of the banks employing AI to facilitate an exceedingly personalized customer journey with the banks.

scholarly journals Digital Transformation of Financial Services using Artificial Intelligence, Machine Learning, and Cloud Computing

2021 ◽  
Vol 12 (06) ◽  
pp. 27-35
Author(s):  
Prudhvi Parne
Keyword(s):  
Artificial Intelligence ◽  
Machine Learning ◽  
Cloud Computing ◽  
Financial Services ◽  
Banking Organization ◽  
Short Period ◽  
Improve Compliance ◽  
To Come ◽  
Financial Transactions ◽  
The Way

Digital disruption is redefining industries and changing the way business function. Artificial Intelligence is the future of banking as it brings the power of advanced data analytics to combat fraudulent transactions and improve compliance. Financial services are the economical backbone of any nation in the world. There are billions of financial transactions which are taking place and all this data is stored and can be considered as a gold mine of data for many different organizations. No human intelligence can dig in this amount of data to come up with something valuable. This is the reason financial organizations are employing artificial intelligence to come up with new algorithms which can change the way financial transactions are being carried out. Artificial Intelligence can complete the task in a very short period. Artificial intelligence can be used to detect frauds, identify possible attacks, and any other kind of anomalies that may be detrimental for the institution. This paper discusses the role of artificial intelligence and machine learning in the finance sector. Additionally, the paper will provide the necessary strategies that any banking organization can follow when digitizing its operations when implementing Artificial Intelligence, Machine learning and Cloud Computing.

The Role of Internet Banking in the Presentation and Marketing of Financial Services and Products in a Digital Environment

2020 ◽  
pp. 162-183
Author(s):  
Berrin Arzu Eren
Keyword(s):  
Financial Institutions ◽  
Financial Services ◽  
Banking Sector ◽  
Internet Banking ◽  
The Internet ◽  
Advantages And Disadvantages ◽  
The World ◽  
Technological Developments ◽  
Use Of Internet

This study aims to reveal the advantages and disadvantages offered by internet banking to financial institutions and their customers as well as the reasons why customers use/do not use internet banking. For this purpose, customers' perspectives on internet banking are presented to the reader in the past and present by statistics. This research points out that many customers of the bank around the world still do not use the internet. Hence, internet banking is not an option. Therefore, in this study, suggestions are made to enable the use of internet banking by the wider masses. In addition to internet banking, technological developments and digital innovations in the banking sector are mentioned in the chapter, and the evolution of internet banking is pointed out.

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