AI in currency: How it is quietly rewriting the rules of modern banking | Current Affairs | Vision IAS

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AI in currency: How it is quietly rewriting the rules of modern banking

2 min read

AI Transforming the Banking Sector

The integration of Artificial Intelligence (AI) in banking is revolutionizing customer service and operational efficiency, enabling seamless processes that were previously cumbersome.

Seamless Customer Experience

  • AI has streamlined processes such as account upgrades and loan closures, reducing the need for paperwork and long waits.

AI in Banking Operations

  • AI applications span customer onboarding, fraud detection, compliance, and internal workflows, aiming for faster response and lower costs.
  • Despite regulatory constraints, banks are embedding AI into their operations to enhance service delivery.
  • AI-powered tools like conversational agents and real-time fraud detection are becoming central to banking operations.

Impact on Customer Service

  • Banks like HDFC and Axis are using AI for customer interactions across multiple platforms and for enhancing employee productivity.
  • AI chatbots and virtual assistants are deployed to resolve queries and provide multilingual support.
  • Axis Bank's GenAI-powered chatbot, Axis Deep Intelligence, supports over 100,000 employees in query resolution.

Efficiency and Automation

  • AI is automating complex processes like credit memo preparation and document processing, drastically reducing processing time.
  • Banking functions such as fraud detection and customer engagement are being transformed with AI technologies like Microsoft 365 Copilot and GitLab Duo.

Challenges and Compliance

  • Despite automation, human oversight remains critical, especially in lending and regulatory tasks, due to the potential cost of errors in AI systems.
  • The RBI has established a committee, FREE-AI, to ensure ethical and responsible AI deployment in the banking sector.

Future of Banking with AI

  • AI is leading to personalized and predictive banking services, offering real-time contextual recommendations.
  • The future of banking will be characterized by invisible, intuitive, and intelligent services that are hyper-personalized and seamlessly integrated into daily life.
  • AI's transformative power in the banking sector is expected to make the most successful banks those with the most efficient algorithms.
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  • AI in Banking
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