The banking sector stands at the threshold of a transformative era driven by the accelerating adoption of AI, says Arjun Mahajan of AND Digital.
In 2023, the banking sector was one of the largest investors in AI, spending $20.6 billion, but as the industry continues to face increasing demands for efficiency, personalisation and agility, AI offers the potential to revolutionise processes while empowering professionals to excel in areas where machines fall short: emotional intelligence, relationship-building, and ethical decision-making.
AI revolution transforming finance professionals
AI is no longer a futuristic concept. With 75 per cent of firms already using AI and another 10 per cent planning to adopt it within the next three years, AI is rapidly becoming the backbone of financial innovation, reshaping the way the industry operates.
AI’s ability to process large volumes of data at speed enables financial institutions to automate finance team’s critical, repetitive tasks like data analysis, compliance monitoring and financial forecasting.
For instance, predictive algorithms can detect market trends in seconds, allowing firms to react dynamically to changing conditions. Similarly, AI-powered fraud detection systems are able to identify suspicious transactions with far greater accuracy than traditional methods, safeguarding assets in real-time.
This wave of automation does more than just optimise processes however, it frees up financial planners to focus on strategic tasks. By handling the smaller, tedious tasks, AI empowers analysts, advisors and financial planners to concentrate on what they do best, solving complex problems and building relationships.
Shifting industry priorities
With AI taking on the burden of routine work, the priorities of the banking sector are beginning to evolve. Emotional intelligence once seen as a secondary skill, is now a key differentiator for financial professionals. As AI systems handle transactional tasks, human advisors are freed to provide personalised guidance that algorithms can’t replicate.
For example, in financial planning, AI tools can generate detailed projections for a client’s retirement savings or investment portfolio, but understanding the aspects of a client’s life goals, fears and aspirations, requires a human touch.
Financial advisers using emotional intelligence to their advantage can interpret these insights and translate them into actionable advice tailored to the individual. They can guide clients through complex financial situations that offer tailored solutions on a human level.
Banks that invest in encouraging emotional intelligence within their workforce are likely to see significant competitive advantages. Clients gravitate toward institutions that treat them as individuals, rather than account numbers, which ultimately encourages trust and loyalty that no machine can replicate.
Ethical decision making
While AI excels in data-driven logic, it lacks the understanding needed to navigate the multifaceted ethical dilemmas that often arise in finance.
Take, for example, the allocation of loans or credit. An AI system can analyse numerical data to determine eligibility, but it may inadvertently cause biases based on incorrect data. Without human intervention, these systems risk disadvantaging key groups of minorities or overlooking unique individual circumstances.
Financial professionals bring the critical thinking and ethical judgment needed to balance data with broader social and contextual considerations.
The duo of humans and machines
The future of banking doesn’t lie in choosing between AI and human expertise, but instead about harnessing the strength of both together.
AI offers unparalleled efficiency and precision, while humans bring creativity, empathy and ethical judgment to the table.
But together, they form a powerful team that can drive the industry toward greater innovation and resilience.
To fully unlock this potential, banks must invest in two key areas: robust AI infrastructure and workforce development. Training financial professionals to use AI technologies in their workflows will not only boost their efficiency but will also amplify their capabilities.
Beyond training, there’s an opportunity to redefine roles. As AI handles more operational tasks, finance professionals can take on roles that prioritise strategic thinking, innovation and client engagement. This shift not only makes jobs more fulfilling, but also positions banks to deliver greater value to their customers.
The bottom line
As AI continues to evolve and revolutionise industries, its role particularly in the banking sector will only become more significant. However, its true power lies in complementing, rather than replacing, human expertise.
By leveraging AI to handle routine tasks, banks can empower their workforce to focus on building meaningful client relationships to navigate ethical landscapes and drive long-term value.
In this new era, success will belong to the businesses and industries that embrace the connection between humans and machines, investing in both technological innovation and emotional and ethical growth.
About the Author
Arjun Mahajan is the Chief of Client Partnerships at AND Digital.