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Artificial Intelligence is the Future of Banking?

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The banking and financial industry has always been the biggest target of cyber hackers because of the potential massive amount of money they can steal.

One of the biggest cyber attacks to ever target the financial industry was carried out when a hacker gained access to more than 100 million Capital One customers’ accounts and credit card applications.

The 33-year-old hacker (Paige Thompson) had previously worked as a tech company software engineer for Amazon Web

Services, the cloud hosting company that Capital One was using. She was able to gain access to the private information by exploiting a web application firewall.

According to Capital One, the hack included credit card applications as far back as 2005. The breach affected around 100 million people in the United States and about 6 million people in Canada.

The company expected to incur between $100 million and $150 million in costs related to the hack, including customer notifications, credit monitoring, tech costs and legal support due to the hack.

Thompson allegedly bragged on social media that she had Capital One information. She claimed to use a special command to extract files in a Capital One directory stored on Amazon’s servers and did little to hide her identity.

She even tweeted that she wanted to distribute the Social Security numbers along with full names and dates of birth. She was arrested by the FBI and is awaiting trial.

There is no doubt that hackers will continue to make banks a major target of cyber-attacks and banks will try and do their best to stop it. One of the methods that banks are implementing to keep your information secure is by using artificial intelligence.

According to the IHS Markit’s “Artificial Intelligence in Banking” report, the global AI market is expected to reach $300 billion by 2030. With that in mind, I want to share with you the top ways artificial intelligence will affect the way you conduct your banking.

Fraud protection. One of the major advantages in using artificial intelligence is fraud detection. As we’ve just discussed, the banking industry is extremely vulnerable to hacks, scams and fraud.

For this reason, banks make fraud detection a priority, and AI can play a major role in decreasing the rates of false positives, along with preventing fraudulent attempts altogether.

AI is very efficient at detecting fraud, with an estimated rate of preventing 63% of fraud before it happens. (That might not sound high, but it’s better than humans do.)

Reducing costs. Banks always look at ways to cut costs and AI provides an advantage when trying to save money. It is expected that by 2023, $447 billion will be saved in costs due to the use of AI in banks.

In particular, using AI for customer service, such as chatbots and voice assistants can provide a personalized experience to customers without the cost of a human being.

Customer service. A survey by the National Business Research Institute reported that 32% of financial institutions are now using AI tools like predictive analytics, voice recognition, and recommendation engines to provide a more personalized touch to the customers.

The fact is, any business that relies heavily on massive amounts of data can benefit from AI and the banking industry is being transformed through the integration of AI.

A PricewaterhouseCooper study shows that 52% of financial services industry executives are currently making “substantial” investments in artificial intelligence. The future of banking will heavily involve computerized systems that will conduct much of your banking experience.

Now, with all the positive things I just listed about AI, there is, of course, a “dark side.” The more that computers run things, the more hackers will try and exploit AI to hack into customers’ accounts.

It will always be a cat and mouse game, which is why you want to check your bank statements and credit card statements often and absolutely put a freeze on your credit report.

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