Today, countless finance organizations rely on artificial intelligence (AI) solutions to streamline day-to-day processes. A recent survey of business leaders shows that the industry’s most widely used applications of AI tech were voice assistants for customer service and financial reporting for operations.
The survey demonstrates how AI technologies are transforming the financial services industry. This short guide gives you a closer look at this transformation and offers valuable insights to encourage you to invest in automation for your fintech business.
AI in the Finance Sector
AI in the finance sector involves the use of new technology like machine learning (ML) to replicate human intelligence and decision-making. These solutions elevate how financial institutions manage, analyze, invest, and protect assets.
These new technologies modernize the entire industry by streamlining manual processes and providing access to deeper insights from generated data. These advantages help decision-makers dictate how and where to invest their money.
AI is also transforming the customer experience by encouraging seamless interactions. With AI, consumers can enjoy improved fraud protection and real-time credit approvals. They can also use AI-powered finance tracker tools to monitor their assets anytime and anywhere.
AI enables financial institutions to accelerate and automate time-consuming tasks. It also allows users to analyze large volumes of data to help forecast future performance. This advantage enables investors to predict investment growth and evaluate risks more efficiently.
AI and ML also help organizations offer an elevated customer experience. These technologies support online banking, which minimizes the need for in-person interactions.
Unfortunately, shifting from traditional to digital banking also came with challenges, such as evolving cyber threats. Moreover, financial organizations are now expected to meet security and compliance regulations because of the sensitive and personal data they handle every day.
That said, if businesses can address the potential gaps in cyber security and protect customer data, they will benefit from investing in automation solutions.
3 Ways AI Is Changing the Finance Industry
While the benefits of AI use are more well-known today, some entrepreneurs remain on the fence about relying on automation solutions. To help you decide whether investing in AI is the right step for your business, let’s look at the three crucial ways AI tools are transforming the finance sector.
1. Boosts fraud detection
Financial institutions are using AI tools to support risk assessment efforts. With AI technologies, insurers can avoid overcompensation, and banks can anticipate loan defaults.
Moreover, these tools play a crucial role in the fight against financial crime. Frauds, their creativity, and resources are constantly evolving despite the strict regulatory framework of modern fintech companies.
Automated systems are especially effective at combating credit card fraud, which has been evolving in recent years due to the rise of e-commerce transactions. AI-powered fraud detection systems can analyze clients’ location, behavior, and buying patterns to alarm users when anomalies occur.
2. Enables personalized customer communication
AI solutions also give financial institutions a better understanding of the customers and their behavior. Through data collection and customer experience optimization, these technologies offer businesses a clearer picture of the customer journey.
These tools analyze consumer interactions and enable businesses to use chatbots. In a 2022 survey of US consumers, roughly a quarter of respondents said they were happy or very happy to communicate with an AI chatbot when reaching out to a brand.
With the power of AI, businesses can produce proactive and unique proposals for investment or insurance products.
Generative AI tools, like ChatGPT, have immense potential at various strategic and operational levels of financial services. They allow users to go further in customer communication and develop personalized and multimedia answers in any language.
However, the most crucial benefit of using AI to elevate customer communication is the automation of various background tasks instantly. Users can even complete these tasks while the conversation with the customer is ongoing.
The following are examples of the tasks users can automate:
- Drawing up contract templates
- Identifying warranty
- Calculating discounts
- Determining customer satisfaction
3. Promotes data-driven investing
The rise of AI helped investors make more data-driven decisions. Today, investors take part in algorithmic or high-frequency trading, where AI enables faster transactions, processing, and decision-making.
Some algorithms test trading systems based on past data to help investors make more accurate stock performance predictions. Investors can rely on AI platforms to recommend the most robust portfolios based on their investment goals.
Grow Your Fintech Business Using AI Technologies
Today, AI tools automate simple tasks, such as analyzing and summarizing documents, filling in Excel tables, and adjusting specific clauses in contracts. However, these solutions can also make a financial enterprise’s management systems more effective and interactive.
This seamless interaction among systems and users can lead to increased productivity and business value. Given the advantages, it might be wise to consider leveraging these technologies.