Banking In The Era Of AI And ML

AI is based on the premise that it can analyse all these data sources together to arrive at a sound, coherent decision. Evaluating creditworthiness is but one everyday application of AI. Technology can help monitor various alternative sources of information relevant to creditworthiness, like whether you are paying your rent and utility bills on time.

- V. P. Nandakumar

The finance business continues to evolve at a rapid pace with new technology and changing consumer dynamics and demographics. Technological advancements have now begun to contribute to the analysis of consumer data. In just over a decade, the establishment of credit bureaus has changed the way the retail lending business is conducted. The introduction of data-driven credit scores has transformed the way credit is extended to borrowers.

The advent of technology, mobile connectivity, and smartphone devices, and its spread among the masses, especially the youth, has shaken-up the way the new generation does banking. Digitization and mobility are now the norm in business, particularly so in financial services. It has become critical for older institutions to evolve with the technology to remain relevant for the next generation as well.

Machine learning (ML) and artificial intelligence (AI) are no longer terms of computer science familiar only to geeks having made inroads into the real world too. Machines are not only fast and efficient in processing, but they are also unbiased. And that is a quality humans may lack.