Artificial Intelligence within Banking Sector

This article discusses the impact of AI in the banking sector, including its advantages and disadvantages. It also covers the ethical, legal, and security concerns of AI in banking. Recommendations for improving the sector are also provided.

Running head: ARTIFICIAL INTELLIGENCE WITHIN BANKING SECTOR
Artificial Intelligence within Banking Sector
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1ARTIFICIAL INTELLIGENCE WITHIN BANKING SECTOR
Table of Contents
1. Introduction..................................................................................................................................2
2. Discussion....................................................................................................................................2
2.1 Impact of AI within Banking Sector......................................................................................2
2.2 Advantages and Disadvantages of AI Applications in Banking Sector................................2
2.3 Ethical, Legal and Security Implications/Concerns of AI within Banking...........................3
3. Conclusion...................................................................................................................................3
4. Recommendations........................................................................................................................4
5. References....................................................................................................................................5

2ARTIFICIAL INTELLIGENCE WITHIN BANKING SECTOR
1. Introduction
Artificial Intelligence or AI is one of the most discussed technological aspects within
every sector. The use of AI is also noteworthy within the banking sector. The various impacts
within the sector such as a stronger backend technological platform is one of the biggest assets of
the sector of banking (Russell and Norvig 2016). In the recent times, the rise of AI based
software systems and the underlying technologies have provided much help to the sector as
people mainly depend on advanced computing systems and chat-bots in order to process
commands and thus get the desired outputs. The use of this technology also helps in enhancing
the banking experience of the customers and also helps in the ease of operations within the
sector.
2. Discussion
2.1 Impact of AI within Banking Sector
The technology is a fast evolving platform. As the technology is advancing and getting
smarter in the recent years, it has led to the widespread adoption within the sector of banking.
Banks make use of AI based technologies to bring in the efficiency within their everyday
operations. The basic form of applications that are adopted by the sector of banking include the
use of smart chat-bots that are meant for customer service, providing personalized services for
the individuals (Choudhary, Akhtar and Zaheer 2013). Banks are also investing much higher
amounts for the adoption of this technology in order to bringing a huge efficiency within the
backend applications, which would also be highly useful for reducing several cases of risks and
fraud within the systems. The impact of chat-bots within the systems might also lead to the
aspect of voice based commands. This process would prove to be extremely useful as customers
would not have to type in commands for processing them. The Interactive Voice Response
System (IVRS) would be helpful for processing different kinds of requests, connecting the
customers with the customer care support and answer the queries of the customer (Jizi et al.
2014).
2.2 Advantages and Disadvantages of AI Applications in Banking Sector
The implementation of AI facility within the sector of banking has various kinds of
potential form of advantages within the banking sector. Some of the various kinds of advantages

3ARTIFICIAL INTELLIGENCE WITHIN BANKING SECTOR
include the facility of digitization. This facility has simplified the banking processes and has
improved the efficiency of different kinds of transactions within the sector (Grigoroudis,
ETsitsiridi and Zopounidis 2013). With impact of AI within the sector, it has also led to the
analyzing of data within different kinds of applications that are based on personal robots. The
impact of personalization within the sector of banking has also led to making better form of
decisions based on automatic based financial advisors and planners. With the impact of AI
within the sector of banking, it would lead to the effective form of analyzing of applications. The
end-user devices and the financial based institutions would be able to help in predicting the
nature of the customers and thus provide various kinds of effective financial advice based on
their provided inputs.
On the other hand, the high implementation of AI within the banking sector would also
lead to different kinds of disadvantages within the sector. The implementation of AI would incur
much high costs that might not be affordable for the banking sector. There would also be some
lack within the personal based communications as the chat-bots would be able to replace the
need of humans.
2.3 Ethical, Legal and Security Implications/Concerns of AI within Banking
The impact of AI within the technological sector of banking would also lead to various
forms of concerns within this sector. The ethical concerns that might be faced by the use of AI
technologies is that with the widespread adoption of AI within the sector would lead to the loss
of jobs and thus reduce the human needs within the workplace (Gennaioli, Martin and Rossi
2013). The impact of AI within the sector would also lead to legal implications such as these
technology should abide by the rules and regulations based on the country. The use of the
technology should not outage the defined laws of the country, which might cause problems based
on trust within the technology (Garcia-Murillo, MacInnes and Bauer 2018). The banking sector
also needs high form of security for the processing of various kinds of transactions within the
sector. As different parties are involved with the processing of banking processes to be executed,
hence there should high form of security standards in order to secure the transactions and thus
maintain a healthy environment for banking processes.

4ARTIFICIAL INTELLIGENCE WITHIN BANKING SECTOR
3. Conclusion
Based on the above discussion, it could be concluded that the impact of AI could be a
revolutionary transformation within the banking sector. This technology has the capability to
bring in high form of changes such as the efficiency within the transactional processes. They
would also be useful for reducing the extreme chances of errors and thus improve the speed of
transactional processes. AI based technologies would also help in improving the customer
experience by enriching smoother technologies, which would help in gaining the trust of
customers and thus provide them with a healthy environment.
4. Recommendations
Based on the conclusions drawn from the above discussion and gained conclusion, there
are some recommendations that could be provided for the betterment of the sector (Mengus and
Pancrazi 2016). There should be major updates within the sector such as the improvement within
the security aspects of the sector. Security is a highly concerned aspect as the major form of
transactions within the sector would mainly depend on the use of highly secured systems.
Various kinds of encryption based standards should be provided within the sector in order to deal
with the various kinds of attacks within the system. The chat-bots should have high recording
capabilities as they would be able to recognize the voices of the humans and thus perform actions
based on them (McKeown and Cochrane 2017). With the proper form of implementation of the
discussed recommendations, it could be said that the banking sector would majorly be benefited
and enrich the customer experience.

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5. References
Choudhary, A.I., Akhtar, S.A. and Zaheer, A., 2013. Impact of transformational and servant
leadership on organizational performance: A comparative analysis. Journal of business
ethics, 116(2), pp.433-440.
Garcia-Murillo, M., MacInnes, I. and Bauer, J.M., 2018. Techno-Unemployment: A Framework
for Assessing the Effects of Information and Communication Technologies on Work. Telematics
and Informatics.
Gennaioli, N., Martin, A. and Rossi, S., 2013. Government default, bonds, and bank lending
around the world: What do the data say?.
Grigoroudis, E., Tsitsiridi, E. and Zopounidis, C., 2013. Linking customer satisfaction, employee
appraisal, and business performance: an evaluation methodology in the banking sector. Annals of
Operations Research, 205(1), pp.5-27.
Jizi, M.I., Salama, A., Dixon, R. and Stratling, R., 2014. Corporate governance and corporate
social responsibility disclosure: Evidence from the US banking sector. Journal of Business
Ethics, 125(4), pp.601-615.
McKeown, T. and Cochrane, R., 2017. Independent professionals and the potential for HRM
innovation. Personnel Review, 46(7), pp.1414-1433.
Mengus, E. and Pancrazi, R., 2016. Endogenous partial insurance and inequality.
Russell, S.J. and Norvig, P., 2016. Artificial intelligence: a modern approach. Malaysia; Pearson
Education Limited,.