From highly-advanced robots to self-driving cars and online streaming platforms, Artificial Intelligence (AI) has been improving our lives for many years. However, the usage of AI isn’t limited to the tech and entertainment industry; it is considered as a major disruptor of the banking and financial sector today. The technology is empowering banks and financial institutions to completely revamp how they operate and manage services, and most importantly transform customer experience interventions.

With AI, the banking sector is welcoming automation solutions and simplifying various labor-intensive processes. Several leading American banks have already adopted this advanced technology to overcome traditional customer service challenges and secure their banking processes. To maintain a sharp competitive edge, every banking corporation and financial institution need to embrace AI and weave it into their everyday operations.

Let’s have a look at the dynamics of AI in the banking sector and how it is changing the face of banking in the United States:

  • Cognitive Process Automation

American banks have experienced a long tenure of consecutive dominance and unquestioned reign. But today, most banking organizations are striving hard to reduce costs, meet margins, and meet high-level customer expectations. AI implementation is highly essential to enable cognitive process automation. The automation can simplify a wide range of error-prone and information-intensive banking services like claims management. Undoubtedly, Artificial Intelligence can reduce operational costs and secure ROI while ensuring accurate and fast processing of services at every step.

  • Fraud and Risk Management

The online threat is an area of massive concern for banks as they digitize on a grand scale. When a financial scam occurs, the affected individual finds it difficult to cope and recover from losses. In such cases, the bank needs a reliable system to detect fraud and immediately take necessary action to handle the situation in an organized manner. AI-based machine learning can play a vital role in the banking sector. By implementing an automated fraud detection program, banking organizations can boost the accuracy of anti-money laundering and credit card fraud detection. Banks can implement deep learning and predictive analytics to monitor all transactions in real-time. Artificial Intelligence can scan through the vast transactional data and instantly track down any unusual activities or irregular behavior patterns while getting smarter day by day.

  • Realistic Interactive Interfaces

AI-based Chatbots are known for identifying the context and emotions in the chat and react to it in the most appropriate way. They can be used to act as customer service representatives and serve consumers consistently throughout the day. Digital personal assistants or virtual assistants do not only allow banks to save time and improve efficiency but also help them save millions of dollars. They ensure a personalized experience for customers while freeing routine daily tasks in banks.

  • Enhanced Customer Experience

Artificial intelligence develops a better understanding of consumers and their behavior by analyzing past interactions and users’ data. AI can be integrated with the app to capture relevant data and empower online wealth management and other banking services. The technology allows banks to build strong relationships with the consumers and deliver meaningful customer engagement by adding intuitive interactions and personalized features.

  • Trading and Securities

AI-based Robotic Process Automation (RPA) plays a crucial role in security settlement through validation of information in the banking operations. Artificial intelligence automates the overall process of trade enrichment and settlement. Several banks have already started implementing AI for reconciliations in the case of Forex transactions and over-the-counter derivatives. They use it for notional pooling and target balancing in liquidity management.

  • Prediction of Future Outcomes and Trends

With its capability of predicting future scenarios by examining past behaviors, Artificial Intelligence helps banks predict future consequences and trends. With its power of Machine Learning, an AI-based system can identify fraud and detect anti-money laundering patterns. It can discover suspicious data patterns to carry out fraud management. Besides, AI can investigate the past to predict the future behavior of data points, helping the organization to up-sell and cross-sell successfully.

  • AI Assistants for Investing

Some banks are diving deeper into the world of Artificial Intelligence by using their advanced system to support their investment banking research and make investment decisions. Though humans still take the final investment decisions in the banking sector, the AI-based systems are unfolding additional opportunities through better discovery and modeling.

With Artificial Intelligence, banks can protect security breaches, detect fraud, and improve their customer services in the most effective way. However, investing in the right AI technology can have a significant impact on overall security and operational efficiency.

How AI is Giving Great Business Opportunities to Financial Institutions

As per Statista, the use of Artificial intelligence in the banking sector is forecasted to generate around 99 billion U.S. dollars by the year 2030, giving several business leaders and FinTech companies great business opportunities. With AI reshaping the banking and financial landscape, it’s vital that business leaders and financial institutions think about investing in the technology and strengthening their systems.

Today, most banks and financial institutions are updating their legacy systems due to the growing number of Fin-tech companies adopting an AI-based system. Japan is one of the leading countries that have already adopted AI in the banking sector and established itself as a tech leader. AI is also going to help human judges at gymnastics events in the 2020 Tokyo Olympics, bringing a sports-driven industrial revolution and giving reliable assistance to human judges.

What’s even more, the financial service agency in Japan has established a legal system for linking financial institutions and Fin-tech companies. With the Tokyo Olympics 2020 approaching, a large number of initiatives are being initiated in the Japanese financial sector. Moreover, the G-MAC Financial Conference is going to be held in Japan in Feb 2020, which will cover the latest topics in the Japanese financial and asset management industry. As part of promoting a dynamic capital market in Japan, Tokyo intends to become an international financial city and encourage efforts to revitalize the asset management business.

The investment environment of Japan is also improving every year due to government efforts. Moreover, China and the United States have become the main trade partners of Japan. The financial institutions looking to expand their business internationally should consider investing in Japan.

Due to the proposed plans of the Tokyo Olympics in 2020, there is a boom in the development of the infrastructure and enhancement of foreign visitors accommodates. In the past few years, Japan also managed to maintain positive growth in the GDP and emerged as the world’s 4th largest buyer of American products. Several municipal governments from Japan provide incentive packages to foreign organizations that establish a research and development center in specific economic development zones. From small to well-established companies can now find excellent support for R & D activities in Japan. The country has also introduced some of the powerful intellectual property laws to encourage research and development, helping American companies with research and development interests.

“One must conduct significant market research in Japan before entering the market and invest their valuable money. Creating a result-driven marketing strategy and reliable web presence will help organizations generate legitimacy and win the heart of the Japanese consumer,” – according to a leading event company from Japan – JTB Communication Design,

Several American companies have already entered the Japanese market and become highly successful. Global companies can easily enter the Japanese market by organizing & attend corporate events in Japan. Before entering the Japanese market, it is always advisable to visit Japan and stay awhile. With the growing usage of AI in banking and other sectors, Japan and United States are all set to give great business opportunities to banks and financial institutions.


  • James Betterson

    Author, husband, father

    Apart from being a Freelancer, Content Developer, Blogger, and Public Speaker. .....