Fatihah Ramzi | 27 December 2021
Artificial Intelligence (AI) is a strong tool which is already being used extensively in the financial services industry and yet, many still do not know its importance and benefits.
Artificial Intelligence (AI) is a strong tool which is already being used extensively in the financial services industry. It has a lot of promise for good if corporations use it with enough diligence, caution, and care. Artificial intelligence has the capacity to revolutionize financial services and the way they are presented to customers. These are especially useful when new regulations place more responsibilities on top executives to analyse and assess higher-quality information from within the company. With that said, let us look at how AI is aiding the finance industry.
1. Increase Efficiency
Through the digitalization of everyday tasks, AI may be able to assist in increasing efficiency. People may be able to concentrate on higher-value work if they are relieved of such mundane activities. This is consistent with the results of the World Economic Forum’s Future of Jobs report, which anticipated that the nature of work for employees will alter. According to the WEF, such a change will benefit both businesses and individuals because upgraded occupations enable people to be more imaginative, innovative, and entrepreneurial.
2. Improve Customer Experience
Banks and insurance businesses will better understand their consumers by utilising big data and AI. This enables them to enhance their services with tailored products, transitioning from a product-centric strategy to a customer-centric one. Chatbots and virtual agents driven by artificial intelligence can also enhance customer experience by delivering on-demand, automatic assistance.
Consumers and businesses are likely to appreciate such a strategy. According to an Accenture research, one out of every two customers wants individualized financial assistance from banks, and 64% wants behaviour-based insurance rates. Relationship managers and financial advisers can use AI-generated insights to better offer solutions that meet the needs of their customers.
3. Provide Staff with Additional Support
While the growth of Automation and artificial intelligence has raised fears of joblessness, prudent AI solutions have demonstrated that AI can aid humans rather than merely replace them. AI solutions that are fair, intelligible, and accountable can also assist in decreasing human biases or errors. When leveraging AI-generated insights to make educated decisions, humans are frequently kept in the loop in financial businesses.
If these are the improvements you want for your company, here are 5 types of AI you can implement in your processes.
1. Informing Credit Decisions
Having strong credit can help an individual get better financing, find a job, and pay for an apartment. With so many of life’s essentials reliant on credit record, the loan and credit acceptance procedure are more critical than ever.
Artificial intelligence (AI) technologies are assisting bankers and credit lenders in making better underwriting judgments by including several indicators that more correctly analyse previously underrepresented consumers, such as millennials, in the credit decision-making process.
2. Managing Risk
In the realm of finance, time is money, but if risks are not managed properly, it may be lethal. Many organisations rely on precise forecasting predictions for both speed and security.
To construct more accurate, agile models, capital markets are increasingly resorting to learning algorithms, a component of artificial intelligence. These forecasts aid financial specialists in identifying trends, identifying dangers, conserving personnel, and ensuring better information for future planning by utilizing current data.
3. Optimizing Trading Activity for Better Returns
Finance was an early adopter of AI, concentrating on improving investors’ investment choices. Both quantitative and computational trading rely heavily on AI nowadays. Quantitative investing uses AI and statistical models to identify investment options but does not always place orders autonomously.
Automated trading, on the other hand, comprises of completely digitalised systems that conducts assessment and accessible positions in place of a trader. These algorithms can analyse enormous data volumes and discover trends more quickly and effectively, allowing for better prediction and more precise forecasting of future market patterns.
4. Personalised Banking
With today’s digitally savvy customers, conventional banking is simply not making it. According to an Accenture survey of 33,000 banking clients, 54% want solutions to assist them in tracking their expenditure and making real-time modifications. In addition, 41% are extremely eager to employ computer-generated financial advice. Artificial intelligence (AI) assistants, such as website chatbots, employ natural language processing and artificial intelligence to create individualised financial advice and deliver fast, self-help consumer assistance.
5. Fraud Detection
Consumers shift money, make payments, deposit cheques, trade stocks, and much more through online accounts and smartphone apps each day, resulting in massive amounts of digital transactions. Any bank or financial institution must now increase its protection and fraud monitoring measures to facilitate these digital transactions. Due to this, artificial intelligence is playing a crucial role in strengthening the security of online banking.
With these 5 key AIs in your company, you will not only be able to protect your database and strengthen your security but you will be able to enhance consumer experience for a seamless flow of transaction and increase the understanding of their finances. In essence the use of AI in the financial industry is inevitable as it is very much necessary for both consumers and staff of major businesses. With the right artificial intelligence, the better the finance industry will meet the demands of customers who want smarter, more efficient, safer methods to access, spend, save and invest their money.