Being a relatively new phenomenon, fintech has already firmly established its place in the crowd of modern trends and branches. Over the last year, finance has gone digital faster than any other sphere of life. We can now benefit from online payments, digital banking services, fundraising, new loaning algorthims and so on and so forth.
But as our technology develops, so does fintech. It would be, at the very sleat, foolish to assume that fintech wouldn’t be the first to benefit from all the new technology we have these days — virtual reality, blockchain, and, in particular, artificial intelligence.
Why is AI the front-runner?
With blockchain and cryptocurrency in the financial game, it really makes people wonder why I think of AI as of the most important innovation in fintech.
It turns out, I’m not alone on this. There’s been a survey conducted by Trends In Fintech in which brockers and financial experts were asked what innovation will be the leading one in the further development of financial technology.
It turns out, the respondents see AI as the leading fintech innovation both in the short and the long run. In fact, some of AI trends will invade finances by the end of this year. That’s why it’s better to be prepared.
Personalization we could imagine
AI allows financial institutions to collect the insights of human behavior. With the use of data science and machine learning, banks and other institutions can finally develop a bunch of personalized services that’ll make the way we use banks these days more time efficient (because, let’s admit it, now visiting a bank is taking too long). Personally, I’d love to see the development of personalized consumer banking and wealth management.
Case study: Invest Cloud and Finworx
In January this year, the innovation platform in fintech called Invest Cloud has announced their collaboration with Finworx. The aim of two companies is to develop the system of personalized communications for registered investment advisors (RAIs).
The new AI powered app will be available to over 670 clients and can be downloaded in App Store.
Developing conversational interfaces for fintech
Financial operations are quite often complex so we’d rather use all the assistance we can get. At this point, convention UI often doesn’t deliver: we are lost in dozens of website blocks or sidebars.
As AI enters the games, the rules change. Right now, AI is able to create intuitive conversational interfaces to make financial operations easier. According to Jeff Orr, the research director in ABI Research:
“The value might be in customer satisfaction, in training methodologies or in systems of deployment; but the overall benefit is clear. The interfaces create a new way for brands to engage with audiences and for businesses to simplify employee tasks”.
Bots to help you out
In one’s financial stuff, there’s a lot to manage and plan. The price of the error can often result in a tremendous financial loss but doing everything right costs one some sleepless nights.
To that, we have a remedy taken a form of an intelligent bot. Your “financial assistant” can answer questions, do financial calculations, and help you:
- Calculate the risk of a big financial risk and build a resiliance system;
- Guide and encourage better money spending habits;
- Choose the products that match the price-quality balance.
Banks have already started building intelligent bots. This change will be a part of a big shift in the way we manage our financial lives.
Advanced and predictive analytics
In order to determine and predict customers’ financial habits, the financial institutions of the future will strongly rely on predictive analytics. These changes will not be helpful for banks only but for their clientele as well.
Based on predictive analytics, a customer will get a suggestion and a guidance. Which credit card should I pay off in the first place? How much money do I need to put down for the house? For how much time should I save for a car?
Ron Barasch, the senior director of marketing in Yodlee (a cloud-based innovation platfrom) put it this way:
“The key is anticipating rather than reacting. Rewarding rather than warning. Your app will become your partner in getting where you need to be. These apps will take the work out of budgeting and do more of the thinking for you.”
Insurance is normally data-driven. That’s exactly why AI and its approach to data can revolutionize the way we approach this branch. For starters, experts are extremely excited by tematics, wireless communication of data. In combination with AI, it can recognize GPS-patterns, predict or avoid road accidents — all of the above will improve customer satisfaction and reduce claims. With AI, customers can definitely be rather safe then sorry.
Over the last decade, technology is revolutionizing finance. However, it’s important to understand that those wheels are only set in motion. We are about to witness more groundbreaking changes than we already have. And, perhaps, the most exciting innovation to be a part of is artificial intelligence.