AI in FinTech: Managing the Finance of the Future
Digital transformation is evolving, and so is the fintech industry by implementing AI trends and leveraging several benefits, such as optimizing productivity, increasing ROI, and enhancing security.
FinTech is adopting AI, thanks to the abundance of available data and the increased computing power affordability. Artificial Intelligence offers a range of financial sector benefits, including improving productivity, increasing profits, and enhancing product quality.
Most FinTech efficiently deploys AI across various finance streams like cybersecurity and customer service. Plus, AI is also changing the way online banking works. For example, Chatbots' National Language Processing and Emotional intelligence are proving to be a cost-effective alternative. Additionally, as AI interprets more data, they rely less on human intervention.
- Successful banking-related chatbot interactions will grow between 2019 and 2023.
- More than 826 million hours will be saved by chatbot interactions by 2023.
- More than 70% of chatbot interactions will be through mobile banking applications.
As the demand for online banking and payment services continues to increase, adopting AI has become a key to sustainability and growth in FinTech. Here are some ways AI trends will manage finance in the future.
1. Fraud Detection
From loan application scams to false insurance claims, deceptive financial activities have increased over the last few years. Besides, counterfeit transactions can cost businesses millions of dollars.
In addition to handling financial losses, most companies must be adept at handling negative customer experiences that can damage the business's reputation.
AI in business and finance venture solutions utilizes machine learning solutions to target fraud and cybersecurity. With large-scale financial operations, reviewing every transaction for suspicious activity is nearly impossible.
AI systems help to monitor banking transactions in real time, while AI algorithms can help detect usual patterns with greater accuracy.
2. Stronger Security
AI has significantly boosted data security services in the FinTech sector. Moreover, most FinTech and banks provide their support to customers via chatbots enabled by AI.
Plus, the AI models offer different solutions that enhance - such as password protection and gaining added access to the system. In addition, AI is adept at improving financial security through speech, face, and finger recognition.
The added AI layer makes it difficult to bypass traditional passwords. In the future, AI-backed security solutions will completely change the future of passwords.
FinTechs are at risk as they handle millions of currencies, so AI will ensure that the system has the highest security level.
3. Improved Customer Service
AI has made considerable changes in customer service for FinTechs and Banks. Clients are becoming accustomed to receiving more quick responses from the banks. Plus, as financial solutions need to be available all the time to facilitate big concerns, AI plays a major role here.
Different AI-powered chatbots and virtual interfaces help minimize the workload by fielding the most frequent user problems. Moreover, it freezes teams' time to focus on more complicated user requests.
AI can help to improve FinTech customer service with complex sentiment analysis that focuses more on the overall customer experience. In addition, communication between customers and FinTech becomes easier with an AI-based system.
4. Customized Banking Service
FinTechs and banks have millions of customers. And if the bank keeps a tab on each customer for personalized service, it can be a daunting task. Besides, customization can make clients trust your business more.
When the clients download the banking application on their mobile, the AI algorithm collects all the customer data. Based on the collected data - the banks provide personalized recommendations and pre-approved products.
Additionally, AI banking apps can help customers to track individual financial goals. Some AI models also analyze speech and voice characteristics to distinguish real patterns and create meaningful insights.
5. Saving Money and Resources
By adopting AI-powered resources and apps, FinTechs can save labor expenses and lots of dollars. AI automation takes over the manual process, thus saving time. AI chatbots handle all the smaller inquiries, reducing the workload on the customer service team.
Moreover, with the money saved on the AI chatbot systems, some banks can offer attractive deals to clients. In short, data-driven AI enhances capital optimization.
6. Algorithm Trading
AI - much like Machine Learning, helps execute stock trades using the preprogrammed instructions that analyze the data for trading. Additionally, AI has transformed traditional data points by crunching millions of data points in real time.
It helps provides insights that the statistical model is unable to detect. Because of the AI in FinTech, customers can trade stocks through mobile apps in real time.
7. Automated Loans
Thanks to AI and ML automation, loans are being approved faster. Specialized AI apps speed up the cost of approving loan applications by performing real-time analytics that helps to make informed decisions.
Different AI models go through verification checks and evaluate the creditworthiness of an individual. Besides, it helps optimize loan approval automation. But, most importantly, AI uses different data points to create customers' accurate financial standing.
AI optimizes the processes across the board and carries repetitive tasks efficiently, undertaking complex tasks with valuable insights. As a result, it enhances customer experience, saves time, and empowers businesses to make meaningful decisions.
The AI revolution in finance is adept at reducing relevant business risks by ensuring complete transparency and trust.
Roberto Sato is the Executive Vice President & Chief Information Officer at Global Electronic Technology, based in Torrance, California. He is passionate about helping people understand content through his easily digestible writing. Live Simply, Give Generously!