AI-Driven

Innovations
BASIC
in Banking
PRESENTATION
 Introduction to AI in Innovative banking

Definition of AI:
• Artificial Intelligence (AI): A branch of computer science that involves the
creation of intelligent machines capable of performing tasks that typically
require human intelligence.
Overview of Key Areas:
Security:
•AI strengthens cybersecurity, protecting against evolving threats.

Customer Experience:
•Personalizes services, improving satisfaction and engagement.

Fraud Prevention:
•Detects and mitigates fraudulent activities in real-time.
Importance Of AI In Modern Banking
Increased Efficiency and Automation:
•AI automates routine tasks (e.g., data entry, transaction processing)
•Reduces operational costs and human error
•Speeds up decision-making processes

Personalized Banking Experiences:

•AI analyzes customer data to offer tailored services
•Enhances user engagement with personalized product recommendations
•Improves customer satisfaction through targeted communication

Enhanced Security Measures:

•AI detects and mitigates security threats in real-time
•Strengthens authentication processes with biometrics
•Safeguards sensitive data with advanced encryption methods
OVERVIEW OF CHALLENGES

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AI-DRIVEN SECURITY INNOVATIONS
Real-time Threat Detection:
•AI systems monitor transactions and network activity
continuously.
•Detect and respond to potential threats instantly.
•Prevents breaches by identifying anomalies early.

Biometric Authentication:
•Uses unique biological traits like facial features and
fingerprints.
•Enhances security by making unauthorized access difficult.
•More reliable than traditional passwords.

Advanced Encryption Techniques:

•AI algorithms strengthen data encryption.
•Protects sensitive information during transactions.
HOW AI WORKS IN
BANKING :-
Examples of AI Applications:

AI systems analyze transaction patterns to detect and prevent

fraud activities

AI-powered chatbots provide 24/7 customer support,

handling queries and complaints efficiently.

AI evaluates creditworthiness using advanced algorithms,

enabling faster and more accurate loan approvals.

AI offers personalized investment advice based on individual

financial profiles and market trends.

AI streamlines the Know Your Customer (KYC) process,

ensuring compliance with regulatory requirements.
Benefits of AI in Banking Innovations
Faster Personali
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Errors Support
ons Services
AI-powered
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Real-time chatbots
processes financial advice
processing of available
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Enhanced Instant Customized

Reduced wait
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7
 AI- Driven
Machines in
Bank
1. AI-Powered ATMs
•Usage: These machines use AI for enhanced customer
service, allowing users to perform complex transactions
without human assistance. AI enables facial
recognition, voice commands, and personalized
experiences.

•Benefit: Improved user experience, faster transactions,

and increased security.

2.AI-Powered Chatbots
•Usage: Virtual assistants are used for
customer support, helping clients resolve
issues, check balances, or apply for
services.
•Benefit: 24/7 availability, faster response
times, and reduced costs for banks.
8
AI – Driven Machines for Bank AI- Driven
Machines in
3. Predictive Analytics for
Investment Bank
•Usage: AI systems analyze
market data, customer behavior,
and other financial trends to
provide investment advice.
•Benefit: Better decision-making
for clientsand improved returns.

4. Automated Loan
Processing
•Usage: AI-powered systems AI-Powered Check Scanners
streamline loan application •Usage: These machines use AI to scan and
approvals by assessing customer process checks with high accuracy by reading
creditworthiness using machine handwritten text, identifying potential fraud, and
learning models. verifying signatures.
•Benefit: Faster approval times, •Benefit: Speeds up check clearing, minimizes
reduced paperwork, and more human error, and enhances security during
accurate risk assessments. transactions. 9
AI IN RISK MANAGEMENT

Predictive Analytics:
•Trend Analysis: AI analyzes historical data to predict future risks
and trends, allowing organizations to anticipate potential problems
before they occur.
•Early Warning: AI models can identify early warning signs of risk,
such as financial instability or operational issues, enabling proactive
measures.

Risk Assessment Models:

•Advanced Algorithms: AI uses complex algorithms to evaluate
the likelihood and impact of various risks, providing more accurate
risk assessments than traditional methods.
•Dynamic Evaluation: AI models continuously update risk
assessments based on new data, ensuring that risk evaluations
remain relevant and current.
PERSONALIZED BANKING EXPERIENCE

Customer Data Customized Services

Analysis: AI analyzes and Products: By
customer data such as understanding
transaction history, individual customer
spending patterns, and behavior, AI can
preferences. recommend
personalized financial
products, offer tailored
advice, and provide
PAYTM SCAM OVERVIEW
1. What Happened in the Paytm Scam?
• Fraudsters tricked Paytm users into sharing their personal information.
• They used fake calls or messages to steal money from users’ accounts.

2. Impact on Customers and the Brand:

• Many customers lost their money, leading to mistrust.
• Paytm’s reputation was damaged, and people became more cautious about using the platform.

3. Lessons Learned:
• The scam highlighted the need for stronger security measures.
• It taught both companies and users to be more vigilant about online safety.
AI’S ROLE IN PREVENTING PAYTM –LIKE SCAMS

1. Real-time Transaction Monitoring:

• AI can track transactions as they happen.
• If something looks unusual, it can alert the bank immediately.
2. AI-powered Fraud Detection Algorithms:
• AI uses complex rules to spot signs of fraud.
• It can quickly identify patterns that humans might miss.
3. Behavioral Analysis for Anomaly Detection:
• AI learns how customers usually behave.
• If it notices someone doing something out of the ordinary, it
flags it as suspicious.
Betting Websites Fraud Overvi
• Common Frauds on Betting Websites:
o Scams like fake betting sites that trick users into
depositing money.
o Manipulation of bets or results to cheat players.

• Financial Implications:
o Users can lose significant amounts of money.
o Fraud can damage the reputation of legitimate betting
sites.

• Regulatory Challenges:
o Laws around online betting are often unclear or not strict
enough.
o Difficulties in monitoring and controlling fraudulent
activities across different regions.
AI IN DETECTING BETTING WEBSITE FRAUD

1. AI Algorithms for Detecting Suspicious Activities:

• AI can automatically watch for unusual behavior, like large
bets or strange betting patterns.
• It helps in spotting activities that could be signs of fraud.

2. Cross-Referencing Data with Known Fraud Patterns:

• AI compares current activities with past fraud cases.
• If something matches a known scam, it raises a warning.

3. Predictive Analysis to Identify Potential Fraudsters:

• AI uses data to predict who might commit fraud in the future.
• It looks for patterns that suggest a person could be a risk,
allowing early action.
  AI IN SBI OFFLINE
BRANCHES
AI-Powered Customer Service
• AI Chatbots at Branches: SBI has introduced AI-based chatbots like SIA (SBI Intelligent Assistant), integrated
into branch operations. These bots assist with basic customer queries and transactions.
• Impact: Reduced wait times for customers and increased efficiency in handling routine queries.
Cash Flow Optimization
AI for Cash Management: AI systems predict cash flow requirements at individual branches, ensuring they are
stocked with the right amount of cash based on historical demand patterns.
• Impact: Reduced operational costs and better cash management at offline branches.
Queue Management Using AI
• AI-Powered Smart Queuing: AI systems help manage queues by predicting customer flow and assigning
resources accordingly. Customers are guided to the right counters, reducing waiting time.
• Impact: Reduces congestion in branches and enhances customer experience.
Document Verification and Compliance Automation
• AI-Based KYC (Know Your Customer): SBI branches are leveraging AI for automating document verification
for KYC processes, reducing the time taken to verify identity documents like Aadhaar, PAN, etc.
• Impact: Faster onboarding of new customers and fewer errors in documentation.
CUSTOMER EXPERIENCE
IMPROVEMENT:
Personalized Services Using AI:
AI helps banks understand each customer’s needs.
It allows banks to offer services that match individual
preferences.

AI-Powered Recommendations:
AI can suggest financial products or services that fit
the customer’s profile.
These recommendations are based on the customer’s
past behavior and data.

Chatbots for 24/7 Assistance:

AI chatbots are available all the time to answer
customer questions.
They provide quick help without needing to talk to a
human agent.
ENHANCING SECURITY IN BRANCHES
AI-Driven Surveillance Systems:
• Cameras powered by AI can monitor branches for suspicious
activity.
• These systems can quickly alert staff if they detect something
unusual.

Biometric Authentication with AI:

• AI can use fingerprints, facial recognition, or voice to confirm a
customer’s identity.
• This makes it harder for fraudsters to impersonate someone else.

Fraud Detection at ATM Machines:

• AI can monitor ATMs to spot unusual behavior, like multiple failed
PIN attempts.
• It can stop fraudulent transactions before they happen.
Example:
J.P. Morgan Chase

• JPMorgan Chase, one of the largest banks in the world, has implemented AI to
enhance its fraud detection capabilities.
AI Implementation:
• The bank uses a combination of machine learning and natural language processing to monitor
transactions in real time.
• JPMorganChase use AI technology called COIN.
• AI algorithms analyze large volumes of data to identify patterns and detect anomalies that may
indicate fraudulent activities.

Results
• Reduction in Fraud: JPMorgan Chase reported a significant reduction in fraud
cases, with AI systems detecting fraudulent transactions more quickly and
accurately than traditional methods.
• Efficiency: The AI system has streamlined the fraud detection process,
reducing the time required to identify and respond to suspicious activities.
• Cost Savings: By preventing fraud more effectively, the bank has saved
millions of dollars in potential losses.
CHALLENGES IN AI IMPLEMENTATION:
Data Privacy Concerns:
•Banks handle a lot of sensitive customer information, such as personal details and financial
data.
•When AI systems process this data, there is a risk that it could be misused or accessed by
unauthorized people.
•Protecting customer data and ensuring it is used ethically is a big challenge.

High Costs of AI Technology:

•AI systems are expensive to develop and maintain.
•Banks need to invest in advanced technology, software, and hardware to run AI tools effectively.
•Smaller banks may find it difficult to afford these technologies, making it harder for them to
implement AI.

Need for Skilled Personnel:

•AI requires highly skilled professionals, such as data scientists, AI engineers, and cybersecurity
experts.
•Finding and hiring these experts can be difficult and costly for banks.
•There is also a need for training existing staff to use AI tools effectively.
 FUTURE OF AI IN BANKING

 Emerging AI Trends in Banking :-

• AI-powered chatbots
• Robotic Process Automation (RPA)
• Predective Analytics

 Potential AI Technologies on the Horizon:-

• AI in voice Banking
• Blockchain and AI integration
• Advanced Biometric Security

 Long-term Impact on the Banking Sector :-

• Increased Efficiency
• Improved Security
• Personalized Banking
 CONCLUSION
Conclusion :-

AI is transforming banking by
enhancing security,
improving customer
experience, and preventing
fraud. It detects threats in
real-time, flagging suspicious
activities to make banking
safer. AI chatbots offer 24/7
support and personalized
recommendations, while
fraud detection systems
identify patterns to prevent
incidents. As AI evolves, it
will further enhance security,
efficiency, and
LET’S PLAY QUIZ :-
Question 1: What is one primary benefit of using AI in the banking sector?
•A) Increased transaction fees
•B) Enhanced customer service through chatbots
•C) Reduced cybersecurity measures
•D) Longer wait times for transactions
Answer :- B

Question 2: Which of the following AI technologies is commonly used for fraud

detection in banking?
•A) Virtual Reality
•B) Machine Learning
•C) Blockchain
•D) 3D Printing
Answer :- B
Q&A
BY
OSHAN MITKARI
22CM051
Government Polytechnic Amravati