Advantages of AI-applications in financial services
Artificial Intelligence is the ability of computers or machines to perform activities primarily associated with human beings or requiring human intelligence. It is also the branch of computing science that concerns the development of machines able to simulate human intelligence and actions. Artificial Intelligence is an emerging technology which has been applied in a variety of industries to serve functions which humans have often previously performed.
One industry which has embraced Artificial intelligence and adopted it into its processes is the Financial Services sector. Financial services are services provided by finance-related organizations which includes banks, accountancy firms, credit-card companies, insurance companies, investment firms and several other related companies. Artificial Intelligence has had several applications for the Financial Services industry since it emerged and these applications have resulted in several benefits for this industry. Artificial Intelligence has become popular in the financial sector in recent years because of its various advantages e.g. helping to streamline multiple related processes as well as offer personalised information for and about customers
As better and more advanced Artificial Intelligence systems are being created, more financial services providers are adopting it into their institutions in a bid to stay on top of their markets and provide their customers and clients with the best service delivery possible. Some of the numerous applications of Artificial Intelligence in the Financial Services Sector include:
1. Fraud Prevention:
Through machine learning (the ability of computer systems to learn from inputted data), Artificial Intelligence systems can monitor and detect irregular or anomalous behaviours in transactions and purchases and flag them to be checked by experts. These systems can also be fed large amounts of historical transaction data to help them learn and get better at detecting fraudulent practices. By learning from inputted data, these Artificial Intelligence-based applications can scan through large amounts of data and detect fraudulent transactions and help prevent fraud and cases of embezzlement. The advantage here is that Artificial Intelligence can go through these transactions faster than any group of humans could ever do and also “learn” on the go to help remove the occurrence of “false-positives”.
2. Customer Service:
Several companies with large number of customers in the financial services industry often face the problem of properly interacting and providing feedback for customers. Artificial Intelligence-run chat bots and conversational systems are currently being created and applied to help financial institutions address this problem. With machine learning, these chat bots are programmed with advanced language processing engines and are trained to identify specific keywords and answer specific customer queries. These systems can also listen in on actual human customer service agents to learn from actual human interactions so it can be mimicked later on. These virtual assistance benefits customers and financial service providers alike as they remove the need for customers to log onto the traditional platforms to resolve these queries, thus saving time and effort.
3. Better Trading Information:
Artificial Intelligence systems can trawl through large amounts of customer-related data faster and more efficiently. This enables financial service providers to better understand behaviour traits of customers and prospects, enabling them to quickly predict and determine trends and outcomes. This helps them stay ahead of the curve and make faster trading and investment decisions.
4. Risk Assessment and Minimization:
Artificial Intelligence can be useful for reviewing large data caches and financial histories of companies and the market a large. This makes it useful in assessing and pointing out business and investment risks which can then be addressed and resolved. Artificial Intelligence can also be programmed to make investment decisions autonomously using processed information or with human oversight.
5. Determine Credit worthiness:
Artificial Intelligence systems can help banks; credit companies and other similar firms determine which customers or businesses are safe to provide loans to and which are not. Artificial Intelligence systems which are able to comb through large amounts of customer data e.g. credit history, social media pages and several other variables etc. are currently being developed and applied in these firms. Through specific algorithms and processes, these Artificial Intelligence systems are able to help banks determine which customers they should grant loans to and which customers to not.
6. Automate processes:
By applying sorted and analysed customer data, Artificial Intelligence systems can help automate processes and tasks. Chat bots, for example can be programmed and trained to provide customers with financial guidance and information deduced from studying market trends. These processed customer data can also be used to personalize a customer’s experience by understanding their needs, habits, and finances etc. so as to recommend relevant and beneficial product options for the customers.
7. Ensure Compliance to Regulations and Rules:
Artificial Intelligence systems can be used to develop a framework to help ensure that regulatory requirements and rules are met and followed. Through machine learning, these systems can be programmed with regulations and rules so as to serve as a watchdog to help spot transactions that fail to adhere to set regulatory practices and procedures. This helps ensure real-time automated transaction monitoring to ensure proper compliance with established rules and regulations.
8. Offer Business Advice and Recommendations:
Artificial Intelligence systems can be used to track investment patterns in the market and offer investment advice to both companies and customers. The Artificial Intelligence system analyses previous investment decisions and compares it to past and present market trends with the aim of predicting profitable investment choices. By rapidly gathering, sorting, and analysing available data and behavioural patterns, Artificial Intelligence enhances the ability of Financial service providers and institutions to provide advice and quality solutions for individuals and clients.
8. Maximise resources:
Through the application of Artificial Intelligence, providers of financial services are enabled to efficiently provide their services while also saving resources like time, money and human effort. By using Artificial intelligence systems to perform functions like customer service and data processing, resources like money and human labour can be saved or diverted to other sections of the company. This helps with lowering company running costs and improving all-round efficiency.