How AI is Affecting Financial Services in 2019

By Manish Shewramani

How AI is Affecting Financial Services in 2019

‘Artificial Intelligence’, what do you understand by the term? An intelligent effort in dealing with anything with fewer or no chances of human error, right?

Machine learning or AI is not the talk of tomorrow. It is something which we are feeling and facing every day. Many different industries are leveraging technology and attaining a high profit. One of such sectors which has a great dominance of AI in business growth is, banking and finance.

Yes, you got it right. After Telecom and High-Tech, it is the third industry which is much influenced by the technology (a McKinsey report). Whether it is solving customer’s query with the help of chatbot, or filtering the prospective customer’s name for a loan application, AI can do almost everything which can bring great profits to the business.

Saying this won’t be wrong that AI is revamping the whole banking and financial services. There are many different approaches through which it is changing the way people deal with banks. We are mentioning a few of the best uses of AI in financial and banking services below.

7 Ways How AI is Benefitting Financial Services

Investment: Saving is always the prime concern of people. But, not every time financial advisors give them the right advice. In the wrong communication, they sometimes lose their prospective clients as well. This is where robo-advisors come in the rescue.

The robo-advisors works in a very intelligent way. First of all, they collect information about investors like their financial goals and the level of risk they are ready to take. Then they input the given information in the algorithms. As a result of this, they can offer personalized investment advice to the user, which has higher chances of acceptance.

By this approach, the asset management cost is lowered. Along with this, it eliminates human errors and conflicts of interest.

Customer Engagement: For a better customer engagement banks are using chatbots. These bots are AI enabled and are capable to respond to customer’s queries and concerns related with their financial transactions.

This is probably one of the technology use which almost every bank and financial service sector are adopting. And, without any doubt, it can be said that they are getting benefitted by that also.

One of the biggest examples of this is Wells Fargo & Company. The company used a chatbot to deal with the normal and most frequent customer query like ‘how much money is there in the customer account’, and ‘which is the nearest ATM’.

Fraud Detection and Risk Management: Banking sector is one amongst the worst affected with cyber fraud. As the banking transactions went online for customer’s convenience, hackers are trying to find breaches to attack the system.

Every day many banking frauds are reported across the globe. With AI banks and financial service providers are trying to fight with such frauds. AI detects fraud before any human analyst could find it.

It not only alerts the bank about a potential fraud but also depicts the likelihood of a card ever becoming compromised.

For instance, if you are trying to log in your internet banking from a different location then the AI can sense the suspicion and can ask you to confirm your identity. If you fail to provide the same then there are chances that it will temporarily block your internet banking.

More Personalized Financial Products: Banks are now able to create more personalized consumer products with the help of AI. Once banks collect enough data about customer spending and saving bank can recommend a specific type of loan or the financial aid the customer is looking for.

Apart from this, with the help of AI banks can customize different mortgages, auto loans, and other financial products. If the right and desired service would be provided to the user then it will have a higher chance of conversion too.

Strategy and Corporate Finance: AI can help the banking and finance industries to set up the right strategy for corporate finance. For instance, they can analyze the credit history of a company and can suggest the best loan offer they have for them. Along with this, AI can perfectly manage corporate finance with higher accuracy as compared to human executives.

Algorithmic Trading: The global trading market is rapidly adopting Algorithmic Trading (AT). The reason for this is very clear. Machines can do trading better than humans removing any type of potential error. Along with this, it also ensures that the best price is secured for both parties.

Automate Process: Once the analyzed and sorted customer data is added in a system, AI can automate the process and tasks. For instance, a chatbot can be programmed and trained to provide financial guidance and information to the customer.

They can read and understand the market trend of the user and hence can provide the user with the best possible assistance related to the query.

Business Acceleration: Banks can use artificial intelligence to expedite knowledge-based activities to improve efficiency and performance. For instance, creating a personalized investment strategy for a customer would have high chances of conversion as compared to a human-made an analysis report.

AI has reduced the cost of financial services (which banks would spend on hiring staff) and apart from this, it has made banking simple for the users. Ultimately, resulting in business acceleration.

The Future of Possibilities

Artificial Intelligence has simplified the way we do things. And, definitely in the field of banking and finance, it has brought tremendous changes. From comforting the customer with 24/7 assistance through a chatbot to helping the bank to detect fraud before it actually happens, AI has completely revolutionized the sector. Machine learning has eliminated a lot of potential errors in the system and has also aided in automating the banking process (thus helping in business acceleration).

It is the effect and better yield of AI in banking and financial system that most of the financial organizations are implementing the technology in their banking app by contacting reliable Android app development services or iPhone app development services providers. The day is not far when we can see a 100% adoption of the technology in this industry.

By Manish Shewramani, who is principle consultant at Credencys Solutions Inc. an Android app development services provider. He is both an innovator and inventor and is an expert in transforming ambiguous ideas into concise, executable strategies that mitigate risk, maximizes ROI and obtain timely measurable business results. He has led several technical and non-technical projects and has experience of the complete project life cycle.

Connect with Manish on:

https://www.linkedin.com/in/shewaramani/
https://twitter.com/stacksurf
https://www.facebook.com/manish.shewaramani

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