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Commercial Banking

Current Trends and Issues

Many developments are affecting the way that the banking industry does business and interacts with its customers. For example, banks are increasingly using Web sites, social media, and mobile applications to interact with customers and allow them to complete financial transactions without the need to visit a “brick and mortar” bank. Some banks are even creating artificial intelligence (AI)-driven virtual financial assistants (e.g., Bank of America’s Erica) to allow customers to check their account balances, make payments, and transfer money. In addition to use in virtual financial assistants, AI is also being utilized in the front office (authentication and biometrics), the middle office (anti-fraud and risk, anti-money laundering, complex compliance workflows), and the back office (credit underwriting, smart contracts). “Although the banking industry is in the early stages of developing robust AI solutions, real potential exists in how AI may transform customer experience,” according to Top-10 Trends in Retail Banking: 2019, from Capgemini, a technology consulting firm. “Going forward, AI will also be leveraged for product development, by applying both qualitative and quantitative data to create financial products.” Other trends worth watching are the following: changing customer expectations, the increasing focus on data security, the growing use of data analytics, the rise of distributed ledger technology, and increasing competition from fintechs and other non-financial services firms.

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