How banks can take advantage of machine learning?

As an innovation lab we are constantly asking questions, looking for problems and trying to pick the good ones. A good problem has 3 attributes:

I believe the first and the second usually walk hand in hand and most people consider the third one as constant. Our main job is to find and push the technological limits and by result solve these new problems.

Nowadays the innovation has gone right to ludicrous speed. If you have an idea that you are not able to do it today, probably there will be a technological breakthrough tomorrow that will enable it.

Here are two examples. For free.

People generate a lot of data with their financial activities. They make transfers, create deposits, use credit and debit cards at different merchants, invest, take loan and the list goes on.

Every interaction can be considered as a decision and the bank can analyse the past and give advice. They are only doing it mostly for premium customers because this is the only way to make this service profitable. With machine learning models the cost could be decreased at the level where the bank can give insights for every customer.

A few examples are account balance prediction, budget recommendation, investment portfolio management and automated daily savings. Actually these are not new ideas. Multiple fintech startups are doing these, but traditional banks are falling behind.

Customer experience is a good thing and can be beneficial on the long run but in the meantime something has to keep the lights on and this is efficient, immediate sales. This is the area where machine learning has been shining already. Ask Amazon for example!

And the best of it that this actually works. You can start implementing it today and with a tiny luck get your first results the same day.

I hope these two short examples created a little bit of excitement and made you think about what you could do with this technology.

My advice is to start studying the field of machine learning and create your first experiments ASAP, because it can offer a lot of value not just for financial institutes but for everyone.

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