Technology and Data News and Events

AI in finance industry

How AI is transforming the finance industry

by Mike Jones in AI 09/06/2021

People are beginning to adapt to AI at a steadily rising rate. It’s clear that modern technology is evolving rapidly and has had some impact on nearly everyone’s lives.

AI has become profoundly popular in multiple industries for a range of reasons. Improving efficiency, managing information, identifying trends in data are a few of the reasons why AI has grown so significantly in recent years.

The finance industry is a particularly important area that needs to be capable of adapting to meet the needs of their customers. The conventional ways of managing customers don’t necessarily work as well today. 

In the case of the finance industry, AI and Machine Learning have various applications. Chatbots, robotic process automation are good examples of AI applications in finance. Global studies have indicated that applying AI could save the finance industry over $440 billion by 2023. Many industry leaders are questioning how exactly AI can transform the finance industry and support the global economy.

 

Risk Assessment 

AI in finance is being utilised for maintaining important business records, in the case of finance, this could be information such as credit scores. Before customers are offered a credit card, a finance company will check multiple records, loans etc and use this data to adjust the interest rate applied to the card offers. 

This process is complex and involves multiple record checks but AI is capable of doing this work quickly by utilising data and then recommending the right product and interest rate for each customer. Human-based analysis may include errors that can result in potential costs to finance the business. AI memory is developed on Machine Learning, eliminating the margin of error.

 

Customer Support

Many finance businesses have launched chatbots on their websites. A chatbot managed and integrated by an AI development business is capable of interacting directly with customers and answering specific questions. This saves time and more importantly money for the business.

 

Detecting and Managing Fraud

The primary goal for most businesses is reducing risk, and this is particularly true in the world of finance. There has been a rising number of security breaches and scams in the finance industry and so customers are more cautious about their money. Many financial institutions have implemented AI services to detect cases of potential fraud. AI tools are capable of detecting fraud through analysis of one transaction activity. They can detect fraud by monitoring unusual transactions and location changes. With the support of AI, it is becoming more difficult for hackers and fraudsters to complete these activities.

 

Finance Advisory Services

Machines can apply bionic advisory tools which provide an efficient and accurate service, but industry experts believe a combination of these tools with the human mind generates the highest results. While these new technology tools can generate efficient results, they do require human intervention to generate the most success.

 

Financial Trading

Understanding future trends in finance are challenging and so many investment businesses use AI to generate a clearer understanding of future patterns. Machines are particularly useful in managing large volumes of data in a short period. They also can assess financial changes and detect certain flaws in a system and offer solutions. 

AI is continuing to make steady progress in the finance industry and judging by the pace of change, it will have a significant impact on the employee structure in certain roles in finance. Ultimately AI can greatly reduce the potential challenges in finance and lessen the potential of security breaches. Customers can be given better services, enhanced support and opportunities for smarter trading.