Mobile banking & Artificial Intelligence: Current issues, achievements, and innovations

The modern development of the banking sector is inextricably linked with the introduction and improvement of remote banking systems. If earlier in order to occupy a leading position in the bank's market, it was necessary to expand the network of its branches, today it must increase the quantity and quality of e-banking services.

Types of Mobile Banking Services

Mobile banking (Internet banking) is a technology of remote banking service ‘home banking’, which allows the client, without visiting the bank office, to perform various operations and receive the following banking services:

• Provision of public banking information, in particular, regarding the terms of deposits and issuance of loans, exchange rates, etc.;
• Purchase and sale of currency;
• Opening deposits;
• Providing authorized information on the status of the client's accounts (balances, turnovers, execution of statements for a certain period);
• Payment for goods, insurance policies, utilities;
• Replenishment of card accounts, etc.

The first reason that forces banks to engage in Internet banking is the emergence of demand for these services. Of course, remote customer service via the Internet is beneficial for banks, primarily because the bank's costs associated with transactions are minimized. The cost of creating (purchasing) and launching a mobile banking system can be compared with the cost of opening a regular branch or bank branch. If to add some transaction costs, the payback rate of the bank's online branch and its overall efficiency will be several times higher than that of a regular branch. But all this is possible if at least one condition is met, which is also the second main reason for banks` interest in mobile banking – it is the ability to attract a large number of customers who are not tied to the geographical location of the bank.
Another important reason that encourages banks to develop Internet services is competition. Already today, the presence of a mobile banking system in a Western bank that serves individuals is a significant competitive advantage of technologically advanced banks over competitors. It can be assumed that the ability to be served via the Internet will become a mandatory element of the complex of banking services in the next 2-3 years.

The Most Amazing Benefits

This type of service gives customers the opportunity to concentrate in one place all the information about their cash flows. The cost of providing banking services over the Internet is much lower than the same for traditional financial services. Internet banking allows you to control your own accounts even outside of a country and is ideal for providing services ‘remotely’, as it does not require the presence of a service provider and is not accompanied by the movement of tangible assets.
Today, with the help of mobile banking, it is possible to carry out two main types of operations – receiving and transmitting information and making payments. Receiving information includes, for example, SMS-informing about bank card transactions, checking the balance on the bank account or bank card account, receiving information about the balance of the loan, viewing exchange rates, searching for the nearest bank branch, and other similar services. Payment services include interbank transfers in various currencies, loan repayment, purchase/sale of a currency, payments to tax and budget organizations, as well as payment for mobile and landline telephones, the Internet, commercial television, housing, and communal services, etc.
Taking into account all of the above, it seems necessary to list the basic benefits of mobile banking:

• Data monetization. Information is the main resource of modern business. Banking analytical information can significantly expand and help both the bank and its customers gain a competitive advantage in the market;
• Social value. One of the striking examples of the trend of social value is the involvement of customers in the formation of innovative areas of the bank, improving its customer orientation, creating a common vision with customers for further development of the bank. The need for a more individual approach to customers, rather than the offer of standardized package solutions, is very relevant in foreign banks, as it meets modern customer expectations (for example, the Italian bank “Widiba”);
• Robotics. Advances in robotics can significantly reduce bank costs, increase shields, and speed up customer service because the work does not get tired, does not require vacation and wages, and most importantly, their work is devoid of the emotional human component. In Japan, for example, work begins on replacing cashiers. And UBS AG, a Swiss global financial company, has already implemented real-time analytics services based on IBM's Watson. In fact, Watson is a computer-based artificial intelligence system that answers customer questions;
• Banking things. In the era of the Internet of Things, it is quite logical that banks are stepping into such changes. When banking operations go online, all areas of everyday life are also connected to the Internet and, consequently, to non-cash payments;
• Entertainment transactions. A popular trend of world banks is to try to make banking transactions more informal and even fun, as well as the integration of banking programs with Facebook, Instagram, and others;
• Constant availability. The ability to carry out banking transactions 24 hours a day, 7 days a week, is no longer an innovation but a common and service of banks. However, banks go further to meet their customers, offering to communicate with their customers through any online media such as WeChat, Facebook Messenger, Google Hangouts, and so on;
• Internet banking. It's not just banking online platforms, it's whole financial ecosystems offered to customers. Particular attention is paid to mobile applications, as the phone becomes the main tool for most banking and other settlement operations;
• Cardless payments. The tendency to make payments without a bank card only with the help of a mobile application is becoming more widespread. Some experts predict a complete abandonment of bank cards in the near future;
• Banking without banks. Promising in the field of banking is the provision of banking services without the direct participation of banking institutions in this process. The so-called FinTech companies are entering the market, replacing banks with data from once completely banking services. Such companies develop unique, innovative proposals and offer more flexible and often more favorable conditions for the use of their products. For example, the development of savings programs for phones, where the program itself calculates your income and accordingly determines the level of savings that should be set, as well as the direction and options for the contribution of these savings. Visiting a bank branch and even looking for the most profitable options for investing in savings is no longer necessary, as a virtual financial advisor can provide such services instantly and even withdraw the required amount of money to save from your account every month.

Mobile Banking: A Race for Artificial Intelligence

Currently, the meaning of the development of artificial intelligence lies primarily in the fact that this is an important area for banks. It creates large-scale complexes of programs that allow a financial organization to identify a client's identity by his face, voice and instantly translate speech into another language. It is important to note that not only customers can contact the bank and receive a response from the robot, there is also a reverse process, which assumes at an early stage special algorithms to identify the fact of a fraud attempt.
Artificial intelligence has a number of factors that have made it an irreplaceable element in the financial technology mechanism. These factors include an increase in the productivity of data processing, an increase in competition, a decrease in the maintenance of all processes, an improvement in machine learning algorithms, as well as overstated consumer requirements for financial companies.
Technologies based on artificial intelligence provide financial companies to stay ahead of the curve in the field of service; that is, customer service is carried out at a sufficiently high level while at a price significantly lower than it was before. All the facts illustrate the prospect for the highest-quality processing of sufficiently large volumes of information while having the ability to self-study and accumulate knowledge at record-high speeds, allowing to improve the entire process of interaction between a person and a computer: computer algorithms that are continuously improved in the process of obtaining new data.

Conclusion

New opportunities for Internet banking among banking services make it one of the most necessary services in the world. All this gives reason to believe that banks will soon simply be able to avoid using Internet services; otherwise, they will lose customers and become uncompetitive in the banking market. Mobile banking services will soon become standard for most banks, as the main customer requirements will be convenience, mobility, and efficiency.