AI in finance: How Artificial Intelligence is helping Fintech firms

AIinfinance:HowArtificial Intelligenceishelping Fintechfirms

Ifonetechnologyisstaggeringtoground zeroofthentechlandscape,it could beArticialIntelligence TheroleofAIinnanceisindisputablytrue asobserved withtheagitationofthetechrevolutioninthebanking& nancialsector

It’sundeniablethatAIhaspioneered thetransformationoftheways nancialinstitutions Fromchatbotassistantstotaskautomation,identity verication,fraud detection,&customeronboarding,thedisruptionofAIin nanceisapath-breakingphenomenonthatisworthyourinterest

ExpertsarepredictingthatAIapplicationsshallinducecostsavingsfor banksatanaggregateamountof$447billionby2023

Moreover,almost80%ofbanksareintegratingAIintotheirsystem, knowingthebenetsofusingArticialIntelligence MachineLearningcan enhanceoperations,asperInsiderIntelligence’sAIinbankingreport

NowyoumustbeyearningtoknowmoreaboutAIinnance,isn’tit?If you ’reaFintechstartup &aspiringtoinvestinAIdevelopmentforyour businessthenyou’velanded ontherightpage

ThisarticlewillhighlightmajorAIusescasesinnanceintherstsection

TopUseCasesofAIinFinance

TABLE OF CONTENTS

ChatGPT&SocialMediaApps:Harnessingthe AI’spoweroflanguagegeneration

UnveilingTheHiddenCostsOfSocialMedia AppDevelopmentIn2023

TheUltimateGuideToBuildASocialMedia Appin2023 HowFintechFirmsAreLeveragingMLIn

thedecisionfornancialinstitutions(FIs)toleverageAIwillbedrivenby technologicaldevelopments WithAI,nowbanksaremoreopportuneto simplifythecomplexprocesses&enhanceoverallcustomerexperiencewith 24*7access

Nomatterifyourbusinessdemandsautomated real-timefraud prevention setup,AIisnowused asabuildingblock

NowcheckoutthemostAIusecasesinnance

1. AIforCreditDecisions

Financialinstitutions&banksuseAIinnancetolettheircustomersmake precise,better-informed &data-drivendecisions

ThepowerofAIhelpsbusinessestoconductaccuratecreditscoring,which ismorecomplex&ultrasophisticated thantraditionalmethods Ithelps lenderstoidentifyhigh-defaultriskapplicants&goahead withonlycreditworthyborrowers

CountingontheAI-powered mechanismmeansunbiased &accuratecredit scoringused bythemajorityofdigitalbanks&loanissuingagencies

Forevidence aleadingautomobilelendingcompanyreported successwith AI-powered solutionsknowingthatAIreduceslossesby23%annually

2.AIandRiskManagement

TheimpactofAIinnancecannotbeovershadowed inareasofrisk management

AI’sprocessingpowerallowsbusinessestostore&handleahugeamount ofbusiness-criticaldatainashorttimealongwiththebenetsofcognitive computingthathelpstohandlebothstructured and unstructured data simultaneously And foryourinformation,thisain’tgonnabeaneasy-going taskforhumans

SuchAI-based algorithmsanalyzethehistoryofcertainriskcases&identify earlysignsofpotentialfutureissuesinthecontextofnancialloss

ThisAIusecaseinnanceisrewardingwhenit’saboutkeepinganeyeon thereal-timemarketupdates Youcancomeup withaccuratepredictions& well-detailed forecaststoposeyournancialplans

JustlikeCrestFinancial,aUSleasingcompanyused AIinnancewithAWS &recorded anoticeableimprovementintheirriskmanagement Knowmore aboutcloudcomputing&platformslikeAWS,MicrosoftAzure,Google Cloud,etc tolearnhowtheywork

3.AIandFraudPrevention

TheroleofArticialIntelligenceinnanceisahugetopicofdiscussion

AIincombinationwithMachinelearningforfraud detectionisthebestway tocountertherisksofnancialfraud

Buthowexactlydothesefraud detectionsystemswork?Well,theyanalyze client’sbehavior,accountactions,locations,habits,&responsestoasecurity processthatworksonamechanism

Also,banksdeployAIsolutionstotrackdownonemoreillegalactivityora nancialcrimeiemoneylaundering

Theadvanced AI-drivenmachinesidentifysuspiciousactivitiestofurthercut downthecostsofinvestigations Astudyrevealed 20%reductionin expensesduetoarticialintelligence&digitalidentityverication

Notjustinnance,AIbroughtabigreliefforeCommercebusinessesthat areinvolved inhigh-volumecard transactions

4.AIandstocktrading

Theconceptofdata-driveninvestmentshasgained tractionoverthelast5 years&madetrilliondollarsin2018

It’sakind ofalgorithm-based,highlyquantitative,orhigh-frequencytypeof trading ThistypeofstocktradingplatformlikeRobinhoodisdeveloped tosimplifytradingforinvestors And ArticialIntelligenceplaysabigrolein it

Asareal-world example,abusinessnewscompanynamed Bloomberg recentlyintroduced itsAlpacaForecastAIPredictionmatrixwhichworksas aprice-forecastingapp forinvestorsusingAI Itgathersdatafrommarket insightsasshared byBloomberg,&combinesitwithadvanced learning algorithmstofurtherread &analyzesharemarketpatterns&price movements

HereishowAI&onlinetradingworktoimprovetheuserexperience:

IntelligentTradingSystemspowered byAIareused tomonitor structured datalikespreadsheets,databases&unstructured datasuch asnews,socialmedia,etc inablinkofaneye

Sincetimemattersmorethananythinginthestockmarket&trading world,AImachinesensurefasterprocessingofstockdatatolet investorsmakefasterdecisions

Thealgorithmsbased onAIarecapableofsharingaccurate&faster predictionsforstockperformance Itsadvanced tradingsystemsuse

pastdatarecordstovalidatetheprocess&comeup withtrulyprecise predictionreports

AIinnance&tradingsharesrecommendationswiththemost impactfulportfoliosofinvestorswho’remoredetermined toachieve long&short-termgoals

5.AIandPersonalizedBanking

Banks&theircustomerswon’thavetodepend onphysicalmodesof managingtheirbankingneedsasAI-powered smartchatbotshave replaced humaninterventionintheprocess

Thesechatbotsprovideself-help options,reducingtheworkload oncall centers Ifwetalkaboutvoice-controlled virtualassistantspowered bytech giantslikeAmazon’sAlexa&Apple’sSiri,theirusecasesareobserved in nance,whereself-educationisturningeasy&accessiblewithuser-friendly bankingtoolsforapaymentschedule,balancechecks,fund transfers,& moreaccountactivities

Atpresent,theabruptdemand fordedicatedFintechappdevelopment serviceprovidersishighamongbanks&nancialinstitutions Why?

Thereasonismoreinclinationofcustomerstowardspersonalized banking& nancialadvice SuchFintechappsuseAItointegrateintelligentsystems forincometracking,spendingbehavior,and recurringexpenses,and coming up withpersonalized plansand nancialtips

Afewreputed USbanksincludingWellsFargo,Chase,&BankofAmerica haverecentlylaunched theirownmobilebankingappstomakebanking simple,convenient,secure,&fastfortheircustomers

6.AIandProcessAutomation

Theprocessofroboticautomationisonthemindsoftheglobalindustry leaders,particularlywhentheywanttocutdownoperationalcosts&boost productivity

Intelligentcharacterrecognitionmakesiteasytoautomateaseriesoftasks thataretime-consuming&complex Instead ofspendingthousandsof hours&effort,AI-enabled softwareautomaticallyveriesdata&generates reportsdigitallyasperthegivenparameters,reviewsdocuments,and extractsinformationfromforms(applications,agreements,etc)

Employingroboticprocessautomationforhigh-frequencyrepetitivetasks eliminatestheroomforhumanerrorand allowsanancialinstitutionto refocusworkforceeffortsonprocessesthatrequirehumaninvolvement Ernst&Younghasreported a50%-70%costreductionforthesekindsof tasks,and Forbescallsita“GatewayDrugToDigitalTransformation”

Aleadingnancialrm,JPMorganChase,hasbeensuccessfullyleveraging RoboticProcessAutomation(RPA)forawhilenowtoperformtaskssuchas extractingdata,complyingwithKnowYourCustomerregulations,and capturingdocuments RPAisoneof‘theveemergingtechnologies‘JP MorganChaseusestoenhancethecashmanagementprocess

Endnote:

TheimplementationofAIinnanceistheneed ofthehourforbanks& nancialinstitutions

Astheworld movesontheprogressivestageofFintechdevelopment, technologieslikeArticialIntelligence,blockchain,cloud computing,data science,etc willuncovermoreoftheirusecases,efciency,& standardizationswithend-to-end pipelinestotheirpowerfulcapabilities

However,ifyou’redesiroustoachievefull-scaleautomation,itwon’tbeso easytoachieveasyoualwaysneed brilliantmindstoinnovateproductsthat gowellbeyond yourexpectations

Whetheryou’reaFintechstartup orabrand fromotherbusinessdomains, weatHieHQarethebestproductpartnertoscaleyourbusiness exponentially Weleverageouraward-winningspecialization,startupcentricapproach,and co-build ecosystemtoco-build customproductsfor varied industryniches Ourexpertiserevolvesaround Fintech,Healthcare, Social &community,and next-gentechnologiesincludingNFT,blockchain, AI/ML,IoT,BLE, &more

FAQs

1.WhataretheethicalchallengesofAIinfinance?

Asmachinesincreasinglybecomebetteratmakinginvestmentdecisions, thereareseveralchallengesdowntheline Forexample,should nancial institutionsbeabletouseAItomakedecisionsaboutwhichproductsand servicestooffertheircustomers?Ifso,whatistherightlevelofdisclosure forthesealgorithms?And nally,whataretheimplicationsofarticial intelligencebecomingmoreintelligentthanhumanbeingsatdeveloping and managingnancialportfolios?

Thesearejustafewexamples–asAIevolvesand getsbetteratinvesting money Wemustcontinuediscussingtheseissuesopenlyand develop solutionsthatstrikeanappropriatebalancebetweenhumansand robotsin nance

2.DoesAIimpactfinancialcustomerprivacy?

Thereisalotofdebatesurroundingthepotentialimpactthatarticial intelligence(AI)hasonnancialcustomerprivacy WhilesomearguethatAI willnegativelyimpactconsumerprivacy,othersbelieveitcould bebenecial inthelongrun

OneargumentagainstAIimpactingnancialcustomerprivacyishow machinescanquicklyidentifypatterns Itcould lead companiestocollect morepersonalinformationaboutcustomerswithouttheirconsentor knowledge,violatingtheirrights

Ontheotherhand,proponentsofAIarguethatitcanhelp banksand other businessesbetterunderstand individualspendinghabitsbyspotting commonbehavioursand factorsacrossdifferentaccounts Itallowsthemto develop moreinnovativemarketingcampaignsand improvecustomer serviceexperiencesbyanticipatingneeds

Ultimately,thereisn’taneasyanswerwhenitcomestowhetherornotAI impactsnancialcustomerprivacynegativelyorpositively