Adoption of AI in financial services

The adoption of artificial intelligence in the financial services industry is rapidly increasing. AI is being used to improve customer experience in a number of ways, including Fraud detection and prevention, Credit scoring and underwriting, Personalized marketing and Customer service.

The use of AI in the financial services industry is still in its early stages, but it is already having a significant impact on the way that businesses interact with their customers. As AI technology continues to develop, we can expect to see even more innovative ways in which AI is used to improve customer experience.

Banks are adopting AI. The implementation of Gen AI in customer interactions, where friction between regulation and innovation may arise, and the impact it is having on customer acquisition and credit applications.

Technological advances and competitive pressures have fueled rapid adoption of artificial intelligence in the financial sector, and this adoption is set to accelerate with the recent emergence of generative AI. GenAI is a significant leap forward in AI technology that enhances its utility for financial institutions that have been quick at adapting it to a broad range of applications.

However, there are risks inherent in the AI technology and its application in the financial sector, including embedded bias, privacy concerns, outcome opaqueness, performance robustness, unique cyberthreats, and the potential for creating new sources and transmission channels of systemic risks.

GenAI could aggravate some of these risks and bring about new types or risks as well, including for financial sector stability.

Overall, the adoption of AI in the financial services industry is a positive trend that is benefiting both customers and businesses. As AI technology continues to develop, we can expect to see even more innovative ways in which AI is used to improve customer experience.

Dr. Deepak Kumar Sahu, President & CEO, VARINDIA