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Artificial Intelligence and Pricing in Banking 5.0

In: Banking 5.0

Author

Listed:
  • Bernardo Nicoletti

    (Temple University)

Abstract

This chapter deals underlines the Artificial intelligence (AI) support to manage and innovate pricing in banking 5.0. The business model canvas for banking 5.0 considers the economic factors: revenue and costs. There is a belief that banking 5.0 acts only on reducing costs. It does have an impact on revenue. The most significant actions are on pricing. On the other side, investments by financial institutions are another vital source of income. Banking 5.0 supports risk pricing and investments. It can support pricing in the direction of the extreme customization of risk evaluation and detailed risk pricing. This chapter analyzes the risk management process. One of the significant benefits of digital banking adoption is the financial institutions’ ability to better forecast risks and customer demand. In this way, there is a transformation of financial institutions’ value proposition from “reactive organizations” to “preventive banking advisors,” lowering their prices and shaping their targets.

Suggested Citation

  • Bernardo Nicoletti, 2021. "Artificial Intelligence and Pricing in Banking 5.0," Palgrave Studies in Financial Services Technology, in: Banking 5.0, chapter 0, pages 369-384, Palgrave Macmillan.
    • Handle: RePEc:pal:psincp:978-3-030-75871-4_12
    DOI: 10.1007/978-3-030-75871-4_12
    as

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