Emerging Need of Artificial Intelligence Applications and their Use cases in the Banking Industry

Abstract

Presently, banks are fronting with many challenges such as deteriorating loan asset quality leading to increasing provisioning requirements, dissatisfied customers, falling profitability, and weakening capital adequacy position. Innovative cutting-edge technologies has made enough space for new, non-traditional players to enter the financial industry, making the banking sector more competitive than ever before. Traditional banks are facing stiff competition from new financial players and foreign banks who are accelerating their business volumes with the help of rising digitisation and AI technology in today's digital era. The focus of the chapter is on understanding how banking is changing in India with the advent of AI applications. The practical use cases of AI in the banking industry shall become inevitable for the entire financial industry in the near future. At last, this chapter analyses various opportunities and threats while adopting AI applications.