Assessing the Importance of AI and Data Analytics in Finance
Customer-focused and inclusivity remain challenges for the finance industry. AI-powered analytics can support businesses in differentiating themselves and enable them to create a competitive edge through delivering personalised experiences for their customers.
Such technologies like AI enable businesses to create a strategic focus and implement analytics as a valued business measure. The analytics and business intelligence software industry has grown significantly in the last few years. Finance has been an early adoption of BI and analytics to drive further growth, reduce risk and improve costs.
With the rapid rise of digital banking, the speed of transaction data has increased significantly. This data has revealed opportunities for businesses to gain insights into customer behaviour and create custom offerings that leverage analytics as a vital service. These new developments include determining key variables such as the high-value customers, who have the highest potential to create revenue growth? Can a business develop an early warning system to detect fraud? Data analytics is continuing to provide the answers that financial leaders need to navigate this challenging environment.
According to a Deloitte survey, the early adopters of this technology benefited from the quick recognition of how analytics can influence the success of a business. This adoption has supported companies with delivering a carefully constructed analytics plan that incorporates AI within an organisation. The survey suggests that these businesses focused on strategies for AI adoption for the teams, clearly recognising the strategic influence of AI in their business.
According to a 2020 McKinsey study, AI technologies can drive revenues by improving the personalisation of services to customers, reduce costs by applying further automation, reduce rates of errors and enhance resource allocation. AI can generate new opportunities based on the ability to create insights from large data sets. The possible value for banks is one of the biggest across industries, as AI has the potential to unlock nearly $1 trillion of value for them every year.
Appreciating the need to go mainstream with AI, international finance businesses are beginning to harness the power of data to generate vital insights. AI and analytics will gradually become an element of every major initiative. It will become a regular part in areas from customers and risk to workforce and supply chain.
Personalised experiences and products created by advanced analytics and ML will be essential in attracting customers in such as competitive landscape. Financial businesses have the opportunity to reduce the barriers and focus on the analytics journey before the early adopters extend the gap even further.