Blockchain and artificial intelligence (AI) solve different tasks, but they can work together to improve many processes in the financial services industry, from customer service to loan application reviews and payment processing.
Adopting AI and blockchain technologies can make your financial sector smarter and help it to perform more effectively. Blockchains can provide transparency and data aggregation; they also enforce contract terms. Meanwhile, AI can automate decision-making and improve internal bank processes.
Here are several ways blockchain and AI technologies can revolutionize the financial industry.
Better Customer Service
Currently, opening an investment account can take several days, because banks need to collect information from various sources about their clients. A blockchain can store all customer information in one place, while AI-driven algorithms can quickly analyze that information and make unbiased decisions. As a result, financial institutions can offer personalized services to more clients faster, more securely and more efficiently.
For instance, the Luvo service chatbot and the KAI-based bot were successfully implemented for reducing customer queries. Using these AI-powered services, bank clients can get answers on their simple questions and can automate daily tasks, like money transfers, account reviews and reporting.
Cheaper And Faster Payments
Time is money. But bank transactions are still slow and costly. In contrast, blockchain-based cross-border payments are inexpensive and fast, because they don’t require third-party authorization.
Just compare the 2% to 3% remittance costs for blockchain transactions with the 5% to 20% withheld by traditional banks. In terms of speed, the number of confirmed Bitcoin transactions per second reached 3.8 in March 2020, while its highest rate was 4.7 in mid-December 2017.
AI technologies can further increase transaction speeds by reducing the need for human input, and banks can automate payment workflows by applying image recognition to financial documents and using natural language processing to support payments via voice assistants.
Less financial crime
According to the United Nations, the amount of money laundered globally varies between $800 billion and $2 trillion per year. However, a combination of blockchains and AI could bring money laundering to an end.
Blockchains ensure data transparency and traceability, giving regulators and law enforcement all the information they need for audits. Additionally, the use of smart contracts can prevent clients from providing false data and banks from changing their contract terms.
AI-based technologies can validate client transactions against payment fraud in real time, and AI-based behavior analytics can enable financial institutions to respond in near real time to insider security incidents.
What to consider when integrating AI and blockchains
When implementing innovative technologies like blockchains and AI systems, the most valuable advice is not to hurry. “Move fast and break things” is not the best option for financial institutions.
Read more: https://www.forbes.com/