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The key constructs of Artificial Intelligence, as we understand: -

! Thinking humanly: The cognitive modelling approach - simulate the actual workings of

human minds.

! Thinking rationally: The laws of thought approach - - codify "right thinking," that is,

irrefutable reasoning processes.

! Acting rationally: The rational agent approach - achieving perfect rationality—always

doing the right think

Our increasing knowledge about the mechanics of the human brain and our ability to embed

brain-like elements into computers have engendered such capabilities as natural language

learning, voice &pattern recognition, machine learning. Such capabilities today are yielding

practical benefits for Industries - question-answering medical diagnostic systems, credit scoring,

program trading, fraud detection, product recommendations, image classification, speech

recognition, language translation, automated financial advisory and self-driving vehicles

Banking & Financial Services Industry , which has traditionally been the early adopters of new

technologies have shown great inclination towards AI as the opportunities are limitless even

though the business value benefits are evolving. In the BFS Industry domain , AI solutions have

the potential to bring about innovations in problem solving capabilities and improving the

productivity of human staff towards delivering superior business outcomes. - attaining new levels

of process efficiency, such as improved operational cost, speed, accuracy and throughput

volume

Homo Sapiens – man the wise is the

scientific nomenclature of humans

because our metal bandwidth is key to our

existence. The field of artificial intelligence

(AI) attempts to understand mechanics of

such intelligent entities and build similar

intelligent entities - which are able to

automate solutions to complex problems:

to analyze the current state, predict

behavior and model the optimum

management solutions.

Regardless of whatever definition we may

have – “ smart machines”, “intelligent

automation “, “cognitive computing “ - AI

is enjoying a renaissance at present

because of impact it has on businesses of

today and the promise it holds for

tomorrow

Advantage AI - Smart Banking

Banking & Financial Services

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Bricks+Clicks’ distribution model, significantly reducing the number of

branches and digitising the back and front office of available

branches with AI Powered solutions

The drivers for banks and financial services

to adopt these technologies can be

classified as under:-

Compete with Non Bank companies -

Technology companies like google , apple

, wealthfront etc who have disrupted the

payment services and wealth

management services ( Robo Advisors)

and are looking to tresspass more into the

traditional areas of banking

Managing the mass of millennials – They

are now the largest, most diverse

generation in the U.S. population as per the

Council of Economic Advisers, President of

USA. In years to come , this age group will

form the key customer base of the banks

and will shape US economy for decades

to come. Hence, its imperative that Banks

takes them seriously

Outperforming their peers - Managing

growth in a competiting marketplace ,

opportunity for cost saving is significant

with AI and process automation - cost

savings from front office automation and

customer-facing functions ,Reduced error

rates, Improved standardization of process

workflows , Fraud management etc

Many Financial Institutions understand the

benefits and impacts of AI. Retail banks,

Asset & Wealth Managers, Brokerage firms,

Investment Banks are all experimenting

/implementing AI solution in various facets of

their “ Business As Usual “processes

In retails banking, AI solutions can deliver

wonders, both in customer experience and

cost. Such solutions can be implemented as

part of future of bank strategy wherein it

enables digital experience for customers in

branch.

Imagine customers being greeted by AI

powered Robots in the bank branches in

customer’s language of choice (driven by

customer persona) and enable their

customers to set up an account or help with

other administrative issues.

It can also support additional functions like

Tellers, Mortgage brokers, insurance claims

and policy processing, insurance

underwriting etc. Such arrangements not

only drive efficiencies but also drive

significant cost optimization for bank’s

branch operations.

For instance, a leading bank has installed AI

powered Intelligent Kiosks to address the

financial planning requirement of their

customer who are transitioning from military

service to civilian life

Robots like Nao (at Bank of Tokyo-Mitsubishi

UFJ) and Pepper (at Mizuho Bank) are

playing the role of customer relation

executives at branch and are driving

excitement amongst the customer groups.

Interestingly, Pepper could become the first

humanoid consumer robot and the

beginning of an era of mechanized, cloud-

connected ’emotion-reading’ digital

assistants.

Pepper went on sale to the public in June

2015 for approximately $1,600, the robot

communicates in multiple languages, using

sensors and cloud-based artificial intelligence

(AI) capabilities and has the ability to evolve

its skills over time through continuous learning.

In the heart of Pepper is an “ emotion

engine” through which it recognizes human

feelings and simulates accordingly.

That said, more banks are making forays into

investing in technology companies making

robots that can answer "complex financial

questions posed in plain English. Innovative

way to address customer interactions and

deploy smart assets in customer facing role.

Data-driven AI applications to make better informed lending decisions

Automated agents that assist the user, over the Internet, in determining insurance needs

AI solution for monitoring users’ behavioral patterns to identify anomalies and warning signs of fraud attempts and occurrences, to identify and prevent bank frauds

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Fraud management is another significant

area where AI powered solution can play a

significant role. It is often frauds that expose

the most vulnerable part of banking, leading

to loss of reputation and customers.

The intent to apply artificial intelligence,

without relying on manual banking systems,

to get an early warning on frauds is

underway and some of the leading global

banks have been experimenting with it. There

has been a paradigm shift in fighting fraud

from “cloak-and-dagger” techniques to

more sophisticated early warning detection

and prevention based on expert /Intelligent

systems.

Unlike expert systems of the past, which

required rules to be hard coded into a system

by a human expert, Brillio ‘s patented PRISM

can process natural language and

unstructured data and learn by experience,

much in the same way humans do. PRISM

acts as a decision support system and helps

to curb bank frauds in much more proactive

way.

Brillio’s patented! technology in cognitive

analytics have inbuilt machine learning

algorithms to sense, predict, infer and think.

This solution can be applied in many more

areas of banking beyond fraud and

customer service, example in the area of

Wealth & Asset Management, especially in

Fiduciary Service.

In the last couple of years, Automated

financial advisors, commonly referred as

Robo Advisors, have invaded this space.

Initially when launched, they disrupted the

advisory services to an extent that there was

a sense of panic amongst the traditional

players.

However, of late many such traditional firms’

have appreciated the need for digital wealth

management and are looking to compete

with combined offerings of advisors

leveraging these platforms to serve the mass

affluent.

Overarching individualized investment

strategy enabled by these AI solutions for the

consumer trumps generalized product sales

within a brokerage format.

In this sphere, Brillio’s solution enables

Traditional advisors seeking to automate their

financial advisory that not only expand its

Direct-To-Consumer capabilities but also

helps to leverage such automated platforms

for advisor solutions and offer the technology

platform to a wide range of broker-dealers,

insurance companies, banks, and custodians

to turn their human advisors into tech-

augmented "cyborg" advisors

Market trends clearly implies that some of the

leading traditional players have not only

adopted such automated platforms but are

also leveraging such platforms to distribute

ETF’s through this new channel.

Both the Robo -advisors and the traditional

firms are driving the cost of Robo-technology

down to zero, relying on their ability to profit

from the traditional channels of

manufacturing investment products (e.g.,

ETFs) and delivering personal financial

advice, and out commoditizing the Robo-

advisor.

Overall, the market for AI systems for

commercial enterprise applications is

growing at 55 % CAGR (approx.) as per

analysts reports. This clearly indicates that

the AI is gaining momentum in commercial

enterprises across the globe including

Banking and Financial Services.

Therefore it’s imperative that the industry

captains put on their “thinking cap” and

envision where AI has the potential to disrupt

their business or even their entire industry.

Market for AI systems for

enterprise applications

expanding at approximately

55 % CAGR

Automated financial advisors and planners that assist users in,

providing customized financial advice Market for AI systems for enterprise applications will approx. $11.1 billion by 2024

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At Brillio, we work with some of the leading brands across different Industry Segments. DigitalSIGMA is Brillio ’s interwoven digital technology stack with integrated execution model which allows us to enable our clients in their digital transformation initiatives – Our structured execution, agile accelerator methodologies, baked-in platforms allows us to think big, start small fail fast and scale quickly. DigitalSIGMA helps in faster adaption of key digital forces required to address unique needs to each Industry, thereby enabling our clients to re-think their business models and processes, create experiences inspired by customers, uncover insights to shape products and services, engage better with employees and business partners. DigitalSIGMA @Brillio delivers end to end in Digital initiatives – From Imagination through Implementation led by global team which includes thought leaders, consulting and strategy experts, business analysts, user experience designers, data scientists, and engineers trained in the latest technologies.

sandip.sinha@brillio.com