AI in Financial Sector
How AI is (and will keep) revolutionizing the Financial Sector.
The Artificial Intelligence hype is growing, more now than ever. All people can talk about AI and how is it gonna affect us today and tomorrow. The recent hype has been created by Sophia (the first robot to receive citizenship of any country) which is making people question its utility and relevance.
In the digital age, “data is money” — The Financial Sector is full of it and Artificial Intelligence feeds on it.
Thus, bringing these two together seems like best exchange EVER! “There’s an increasing trend around using AI around financial payments,” said Sumeet Vermani, a global marketing leader working for fintech providers such as Red Box Recorders, a company that records communication, in the financial services industry for compliance.
Artificial Intelligence (AI) improves results by applying methods derived from aspects of Human Intelligence at a beyond human scale. It helps Fintech companies in solving human problems, by increasing efficiency and has revolutionized them.
Technologies like Machine Learning, Artificial Intelligence (AI), Neural Networks, Big Data Analytics, evolutionary algorithms, and much more have allowed computers to crunch huge varied, diverse and deep data-sets than ever before.
The following are some examples of how AI can be deployed in financial services:
· Wealth Management for Masses (e.g. Smart Wallets, Trading)
· Customer Support, Transactions, and Helpdesks
· Data Analysis and Advanced Analytics
· Fraud Detections and Repetitive Tasks
· Automated Virtual Financial Assistants
Wealth Management for Masses
As mentioned above, Artificial Intelligence feeds on data, it learns from your past experiences and tendencies and predicts future behavior. This comes in handy while you’re planning your finances or budgets.
Smart wallets developed using artificial intelligence monitor and learn user’s behavior and actions. These instruct users to restrain and alter their personal finance spending for saving their expenses. AI can also be really very helpful in Trading as it can learn from the past trends of the market — when the market is bullish or bearish — and advice you to invest or liquidate your assets accordingly.
Customer Support, Transactions, and Helpdesks
It’s important to note that artificial intelligence doesn’t only have a behind-the-scenes role within the business world. Now, this technology is being introduced into chatbots, letting them undertake a variety of internal and external communications. However, AI-powered chatbots are not just being used for communication purposes…
They’re now being implemented by a variety of financial institutions as self-service customer-facing tools. For example, HSBC has created its own AI-powered chatbot that helps customers with a variety of tasks and queries. Not only this, the American Express bot, Amexbot, can help customers with questions regarding their accounts and personal information.
Other ways chatbots can be used in the financial sector include, but are not limited to:
- Driving more seamless shopping
- Taking orders directly from social media channels
- Editing and checking bank account details
- Supervising consumer credit score
- Informing consumers of upcoming payments
- Helping consumers to create realistic budgets
Data Analysis and Advanced Analytics
One of the most valuable benefits that AI brings to organizations of all kinds is data. The future of Fintech is largely reliant on gathering data and staying ahead of the competition, and AI can make that happen.
With AI, you can process a huge volume of data which will, in turn, offer you some game-changing insights. These insights can be used to create reports that not only increase productivity and revenue, but also help with complex decision-making processes. AI allows you to process this information more accurately and quickly. Machine learning can recognize specific patterns and is able to improve with every task it undertakes. As a result, its ability to process information and give you valuable insights becomes quicker over time.
Fraud Detections and Repetitive Tasks
Your Analytics tools collect evidence and analyse data necessary for conviction. The Artificial Intelligence tools then learn and monitor user’s behavioral patterns to identify rarity and warning signs of fraud attempts and incidences. It can thus identify the repetitive tasks and give you suggestions accordingly.
This helps you by not only saving your time over repetitive tasks but also by detecting fraud and preventing it before it can even happen. Remember the ‘bogus’ AP tweet about explosions at the White house? That is a classic example for this situation.
Automated Virtual Financial Assistants
Automated Virtual Financial assistants and planners assist users in making financial decisions. These include monitoring events, stock and bond price trends according to the user’s financial goals and personal portfolio, which can help in making recommendations regarding bonds and stocks to buy or sell. These systems often called “Robo-Advisors” and are increasingly being offered both by established Financial companies and Fintech Startups.
AI is making the industry more digitalized than ever before. Its final goal will be to create the (frictionless) bank of the future: no branches, no credit cards, no frauds, no menial reporting activities. A bank-as-a-platform with modular components that increases our financial literacy and has no physical products or spaces.
The article is written by Disha Karamchandani, Volopay’s Product Analyst.