Digital disruption is greatly impacting how businesses operate in our contemporary world and revolutionizing industries including the financial industry. Many industries are beginning to access different options and embracing options that would help them create more value and boost sales in the face ever-increasing and evolving technologies. The financial sector is experiencing innovative changes and the primary among them is an increase in the provision of customer-centered services.
Tech-savvy users of financial services expect their banks to up their game to meet up with the current trend. Financial institutions in their quest to provide their customers with seamless services expand their services to retail, IT and telecommunication. This gives rise to mobile banking, e-banking and instant money transfers. Banks currently face constant threats from agile Financial Technology (FinTech) players.
To stay on top of the game and maintain competitiveness, financial institutions are investing in technology and restructuring their services and how their businesses operate. This connection between financial institutions and technology known as “Fintech” is a term that emerged with the blockchain and cryptocurrency innovation. These technologies together with artificial intelligence are one of those innovative technologies that are bound to revolutionize the fintech industry.
Artificial Intelligence is currently making a great impact on the financial industry. Nearly, all financial technology companies are, currently, utilizing AI to improve value, minimize costs and save time.
The growing numbers of Fintech companies that are emerging by day will redefine the future and AI technology applications will set the stage for business to enhance competitiveness and boost sales.
Going forward, Artificial Intelligence will assist financial companies to boost their income, minimize risk, and increase their proceeds whether in banking, trading, investing lending, or the fintech industry.
Benefits of AI in the financial industry
Artificial Intelligence assists financial service companies to save time and money. AI algorithms are utilized to analyze data, generate insights, enhance customer service, and predict sales performance and boost sales.
AI algorithms and automation
Through machine learning and automation AI is helping bossiness to automate tasks such as data records matching, data analyses and more. AI will soon replace human ability to make a decision with more refined technologies given its capacity for continual learning. AI algorithms are beneficial to companies as it makes the task of access big data and processing it for useful insight much more effective.
AI now can seamlessly manage different types of data including parameters and numbers. It can make analyses, interpret data, and write text almost as much as humans. AI equally helps in image recognition, activity detection and scene understanding which can greatly help in fraud detection.
Information filtering and sentiment analysis
AI assists human workers in the finance industry to be more efficient by filtering major information collected from a number of sources. Reuters News Tracer, for instance, utilizes Machine Learning algorithms to filter tweets and gather some breaking news before it’s announced anywhere.
Similarly, financial services companies can utilize AI to identify brand sentiment from social media and text data, analyze it, and convert it into useful business advice.
Impacts of AI on various verticals of the financial industry
AI and the banking industry
AI boosts efficiency, provides insights about data, and manages risk. Chatbots assist banks to provide a better service to customers despite the fact that they are yet to grow to the point where they can manage customer support without human intervention. Using Artificial intelligence to process natural language, bots can listen to phone calls of agents and provide correct real-time response.
Top industry players like Wells Fargo are utilizing chatbots to boost customer service support, save time and cost. A lot of these chatbots utilize AI predictive analytics and cognitive technologies to provide personalized customer support, access the financial portfolio of customers, their banking history, and investment goals for trade automation and for providing trading advice. Predictive analytics technologies use the customer base of a company to make churn prediction, advanced revenue prediction, and forecast sales.
Cognitive technology and Artificial Intelligence (AI) boost the digital presence and efficiency of banks and assist them to remain competitive in the face of the FinTech threats. Research data from the National Business Research Institute and Narrative Science show that roughly 32 percent of businesses in the financial industry are presently utilizing AI technologies like Predictive Analytics, Voice Recognition and more.
The future of banking will be shaped by Artificial Intelligence because AI makes advanced data analytics possible. This helps to eliminate fraud and boost compliance. AI algorithms can now perform anti-money laundering activities which previously take days to complete in a few seconds.
Through the help of AI, banks can now manage and analyze large data sets in real-time for valuable insights. AI technologies including AI bots, digital payment advisers and biometric fraud detection procedures help banks to improve the quality of their services. This translates to enhanced revenue, minimized costs and an increase in profits.
Ways artificial intelligence helps banks to remain competitive
Improved customer service support
Through previous interactions with customers, AI gets to know the customers and their behaviors better. This helps the bank to provide customize and integrated personalized products and services with meaningful intuitive interactions that result in great customer engagement and strong relationships.
Artificial intelligence can predict future trends through analysis of past behaviors. Thus, AI banks can predict future outcomes and trends. This way, AI helps banks to detect fraud, anti-money laundering arrangement and provide some recommendations to customers.
Through AI Machine Learning and Cognition ability banks can uncover, fraudulent activities and save millions. AI can also detect suspicious data patterns from a large data set for fraud prevention.
Automation of cognitive process
AI makes automation of varieties of large data sets which is commonly very costly and prone to error like in management of claims possible. This boosts ROI, minimizes costs and ensures precise and real-time service processing. Cognitive process automation basically automates a group of tasks that improvises on former repetitions through continuous machine learning.
Accurate interactive interfaces
Chatbots identifies the emotions and context of a chat discussion and provide an accurate response. This saves a lot of time and money for banks and enhances their operational efficiency.
AI Cognitive technologies which can think and react similarly to human professionals offer real-time optimal solutions to customers with the use of accessible data. The documentation of expert information stored in the knowledge database of these cognitive systems helps banks to make strategic decisions.
Robotic automation of processes
Artificial intelligence conducts reviews of processes and enhances them through Robotic Process Automation (RPA). This makes the automation of nearly 80 percent of repetitive work processes possible. This gives staff sufficient time to concentrate on ways to add value in tasks that require more human intervention.
AI can equally help banks to easily detect customers who are planning to leave the bank. AI helps banks to get useful insight from unstructured data and across databases easily and seamlessly compared to using a legion of human analysts.
How Artificial Intelligence algorithms improve trading
AI can assist in the management and augmentation of trading rules and help in trading decisions. It can help in the procession of data and in the creation of algorithms that manage rules of trades. Investment firms implement trading algorithms using sentiments and insights obtained from social media and other public information sources.
The Hong Kong-based Aidya, for instance, utilizes algorithms to carry out automated. A few trading companies such as the Nomura Securities from Japan uses AI robo-traders to do high-frequency trading for profit enhancement.
Artificial Intelligence and the investment industry
In the investment industry, B2C Robo-advisors are used to boost portfolio management and rebalancing decisions made by humans. They provide investment advice by making an analysis of the individual’s portfolio, risk tolerance, and earlier investment decisions.
For instance, Kensho’s intelligence-grade database offers market trend information to global traders. Through AI from IBM’s Watson, ForwardLane offers financial advisors custom-made investment advice and a quantitative model which only the affluent previously access.
Artificial Intelligence and the credit lending industry
Credit decision-makers utilize Artificial Intelligence for forceful credit lending applications to attain faster, more precise risk assessment. FICO, for instance, utilizes AI, to create credit risk models. AI can equally assist creditors to collect outstanding debts.
AI helps banks to maintain compliance and detect fraud. IPSoft’s Amelia, for instance, utilizes Natural Language Processing to probe legal and regulatory text to check issues of compliance.
AI and data services
Artificial intelligence assists financial companies to enhance competitiveness boosts sales and generates more income by boosting trading accuracy and enhancing wealth management procedures.
Artificial Intelligence can be applied in the different verticals of the financial industries and is poised to transform and revolutionize the industry. Through AI, businesses can detect, analyze brand sentiment and provide investment insights. AI equally results in more efficient banking services and help to minimize risk and identify fraud.
Artificial intelligence, blockchain and cryptocurrency technologies are revolutionizing the financial industries and impacting on the operation of banks.
Cryptocurrencies as a means of payment or a source of funding are threatening how traditional banking performs activities and transforming them. Banks are partnering with fintech companies to maintain competitiveness by providing fast transactions at a lower cost. Data implementation which was previously impossible can now easily be utilized through Artificial intelligence.
Besides helping to enhance the speed of transactions and reducing security risks, these technologies can assist financial companies in the development of blockchain smart contracts which additionally enhances digital transactions done with cryptocurrency.
Top financial company JPMorgan, last year declared its intention to launch the companies crypto coin (JPM) to facilitate instant transfers on the blockchain.
Going forward, besides empowering financial institutions through automation its savvy employees, AI will equally make automation procedures sufficiently intelligent to mitigate cyber risks and FinTech competitions.
AI will allow banks to maximize human and machine capacities to influence the cost and operational efficiencies, and provide custom-made services. Many industry leaders have through the implementation of AI technologies and advanced data analytics powered by AI acted with due diligence and reaped abundant fruits. Financial service companies need to use data science services to help them maximize the benefits of AI advanced analytics and automation.
Empower your financial business with AI
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