In the last two years alone, 90% of the world's entire data has been created. With an ever-increasing deluge of information being generated across the globe, traditional algorithm-based systems have been unable to derive maximum value from available data.
In order to address this challenge, some innovative techniques like Cognitive Computing have been developed which mimic the way the human brain works. International Data Corporation (IDC) predicts that Cognitive Computing will save US companies $ 60 billion a year by 2020 and lead to a 20 % improvement in IT efficiency for financial services firms by 2022.
This technology, inspired from IBM’s supercomputer system ‘Watson’, holds huge promise in banking as well. Cognitive Banking has been employed by few banks to improve loan underwriting process. Australia’s ANZ Bank applied cognitive computing in market data, financial statements, product disclosure statements etc. to save 1,000 man-hours of back office activity. With increased automation, loan application processes for more than 150,000 customers of the bank have been streamlined.
Cognitive Computing has improved Wealth Management Services as well. Using cognitive systems, banks can analyse multiple sources of investor information to explore the latest market changes, calculate risks and limits to provide customised recommendations based on customers’ personal profiles. DBS Bank from Singapore has already implemented this technology to offer highly customized investment ideas for its customers based on their present and future needs in wealth management.
Back home in India, Yes Bank is combining the power of Cognitive Computing and APIs to improve the digital experience of bank’s partners, developers and corporate clients. On the other hand, InspireOne Technologies, one of the first users of Cognitive Computing in India, has built a product that assesses employees’ leadership capabilities by gathering intelligence through employees’ e-mail communications.
Considering major industry challenges such as commoditization, discerning customers and disruptive competitors, it is high time for banks and financial institutions to adopt innovative techniques like Cognitive Computing. As per Accenture’s research, in 2015, only a fifth of the technology investments were allocated to innovative projects such as cognitive analytics.
Credits : Akhil Handa>