The Importance of AI in Banking

Artificial intelligence, commonly known as AI, is a very powerful technology. A thoughtful implementation of AI can do wonders in automating business functions. AI has the power to transform a wide variety of industries through its application. As computer systems have evolved over time, they have become very powerful. Consequently, machines have also become very powerful and can perform many complicated tasks with ease. For example, Optical Character Recognition (OCR) is a task that even personal computers can perform easily with the help of software. However, OCR requires intelligence to translate dots from an image into characters. So, in an ideal case, OCR will be considered an area of AI. However, because of the power of machines, we tend to not consider it as an application of AI.

In this chapter, our focus is to understand what AI is and its application in banking. Banking is an industry or domain that is extremely diversified and complex. To simplify complex banking functions, the banking industry requires a constant supply of advanced technological solutions. As shown in a recent analysis conducted by Forbes (https://www.forbes.com/sites/forbestechcouncil/2018/12/05/how-artificial-intelligence-is-helping-financial-institutions/#2e989fae460a), the implementation of AI in various banking processes will save the industry more than $1 trillion by 2030. Consequently, the banking industry will benefit the most from AI systems in the near future.

We will begin with a brief introduction to AI and banking as an industry. Here, we will define the methods of implementing AI in software systems. We will also learn how the banking industry can benefit from the application of AI. There will be many more topics to cover before we complete this chapter. So, instead of simply discussing what you can expect from this chapter, let's jump straight into it!

In this chapter, we'll focus on the following topics:

• What is AI?
• Understanding the banking sector
• Importance of accessible banking
• Application of AI in banking