Technology is gradually booming. It is slowly intervening in all and every sector. And, it is also getting implemented in the banking sector now. But, as real money is involved, the banking sector is subject to serious threats such as security compromises, system hacks, cyber frauds, and so forth.
Further, frauds and cyber crimes are increasing with moving time, and fraudsters are also advancing parallelly with technology. Due to such a scenario, the need to modernize traditional banking methods, and make them efficient with the help of technology is well versed.
One such traditional banking operation that needs to be revamped is loan disbursement. Be it for businesses, or customers’ personal needs, loans can be customers’ saviors. But, as important as the loan industry is, the anomalous processing and other associated challenges make it strenuous for the banks to disburse loans on time.
Artificial Intelligence and Machine Learning then come to the rescue.
Let’s discuss in detail how ML and AI can help in the modern loan disbursement process. But, first, understand why there emerged a need to amalgamate strong tech in the loan process.
Loan Disbursement: The Loopholes, and Anomalies
Believe it or not, a loan is one of the bank’s business operations that benefit both customers and banks. Banks get chunks of interest, and customers get financial support. But, often the process is not as easy as it seems. From basic to advanced steps, loan disbursement is a complex process.
Banks look for a range of factors, and customers arrange the documents needed, clear the verification rounds, etc., before the final loan disbursement. Here are some of the steps-
1. Filing the Loan Application
Requesting a loan from a bank can be daunting. Though banks appreciate loan-seeking customers, the process of getting the loan sanctioned, and approved is complex. The process can involve steps like credit profiling, borrower verification, and so forth. And, the decision on the loan application is often decided on these,
Let alone the process of getting the loan approved is complex, but the filing of the application is also very tedious, and confusing for customers. Arranging a range of documents, filling up lengthy online, or offline application forms, supporting information, verifications, and whatnots. Filling up a loan application can be overwhelming for customers.
Also, as not all customers are well-versed in the loan application process, this needs to be made easy, and seamless. With AI & ML in place, the loan application process can be automated.
These technologies can be leveraged to build a platform where customers can easily put up loan requests to the bank. The request can be submitted either through an online platform, through a bank helpline, or via traditional ways of visiting bank branches, and meeting officials. This can be a reliable solution for both customers and bank officials.
2. Checking Eligibility
Imagine you go through the process of applying for a loan through a bank website. Arrange documents, fill up the form, also pay the first apply fees, and then you come to know that you were not eligible for the loan you applied for. This can be disconsolate.
AI & ML can fill the gaps here.
With these technologies, a platform can be built where customers can check their eligibility for a loan, apply for a loan, and in some cases, can also get a loan of a minimal amount online. That too without a bank branch visit. Yes, technology can make it that easy!
Banks can also get help in credit profiling to validate the borrower’s identity, history, background, and other details. AI can make all these processes automated, and with encryption.
3. Getting Loan Disbursed
Banks feel it is challenging to process the accepted loan applications on time. As there can be a number of loan applications pending, processing all within the time limit can be intimidating. Further, the human capability of checking the loan applications, and approving them same can be limiting. And, also the discrepancy, and room for anomalous processes can be disturbing, and delay the process of loan disbursement.
AI & ML Algorithms can Solve this Problem!
AI & ML algorithms can precisely process loan applications too on time. Taking into account all the documents, and information updated by customers online, these technologies can help banks to overcome any hurdles in loan application processing. Be it the time constraint, or the challenge of processing every application precisely, taking support from technology can help banks, as well as customers.
This can also help overcome other glitches like customer history checks, background analysis, and whatnot! Also, the software powered by machine learning, and AI can help surface data variables otherwise difficult to notice.
But, the applications of AI & ML for the banking industry don’t end here. These technologies help banks in all other operations also. Here are some of the applications of AI & ML rather than Loan disbursements!
Important Article: What is Machine Learning And Its Importance in Today’s World
Machine Learning in Finance: Providing Banking Sectors a Needed Revolution
It is of no surprise how the banking sector struggles to achieve accuracy, security, and optimization. Be it in terms of processing times, or making the banking experience efficient for customers, the need for a stable, and scalable system remains alive.
AI & ML seem to be the right candidates to bring the revolution. Here are the other advantages of AI & ML for the banking sector-
1. Safe, and Secure Experience
Ever since the banking sector has gone digital, the need for a system that can provide banking solutions online with the utmost security is there. And, banking sectors also invest loads of money to make the online banking experience safe & secure for customers. AI & ML can be of significant benefit here.
These can be leveraged to build a platform with AI & ML-guided security principles. Two-factor authentication, restricted access, and other methods can provide enhanced security and safety to such platforms.
Further, if integrated correctly, these technologies can also detect any possible scams, and cyber frauds at the right time. This can help curb the significant money losses and cyber fraud in the banking industry.
2. Chatbots at Rescue
AI-powered chatbots are the new customer service agents for banking sectors. And, as these can help customers even after banking hours, the problems of delivering optimum customer service, and support can be dealt with.
These can be programmed to answer basic to advanced queries of customers at any time of the day. In this way, banks can bridge the gap between customers, and banking solutions too even after the banking hours. This can be game-changing for the BFSI (Banking-finance services and Insurance) sector.
3. Everything Automated
Banking processes are tedious, and generally take a lot of time. But, for customers, waiting can sometimes delay important bank work. Making banking processes automated can then be a smart alternative.
With the help of AI & ML algorithms, banking operations can be automated. And just because today’s customer is already comfortable with online platforms, implementing online banking platforms solves the problems, and doesn’t propose any hurdles.
4. Customer Centric Banking
Today’s customer is spoiled. He needs everything at his fingertips that too with security and encryption. And, the banking industry is no different!
“At the end of the day, customer-centric Fin-Tech is going to win”
For such, AI & ML can help banks make their solutions, and services customer-centric. From customized apps to Chatbots available for customers 24*7, AI & ML can help create customer-centric alternatives to traditional banking operations. This can fill the gaps in the modern banking system.
5. Say no to Branch Visits
Handling heavy customer crowds at peak banking hours can limit the number of queries being solved. This can further be problematic for customers, as well as bank officials. But, technology is advancing every day and can be leveraged to reduce the number of bank visits by customers.
This can be done via an online platform such as a web app, mobile app, or website. These can help customers do some of the banking tasks online, and would reduce the hassle of visiting bank branches for every bank work. If you also want a banking app, contact the experts of iTechnolabs today, and get the best services.
This can be a big breakthrough for professional people who generally don’t get time to visit branches. Many of the banks are already doing this where they provide all banking solutions on one platform for customers.
Machine Learning in Finance: Setting Foundations For Banking
Modern Banking is different. This is to match up the dynamic, and challenging times. With the ease with which cyber crimes and money frauds are being executed, it is of utmost need to establish a banking system that’s robust, and safe from any frauds and cyber crimes.
Related Article: How Artificial Intelligence Technology is Transforming the World
Are You Looking for Machine Learning for the Finance Industry?
Technology can come to the rescue. And, ML & AI are the most betted on technologies. The algorithms on robust principles of ML & AI provide safe and secure banking platforms. Not only these, but these technologies can also help integrate other important features on banking platforms as well. Loan disbursement, customer service, support, and whatnot! AI & ML are making modern banking strong, and scalable.