10/1/21, 11:01 AM
How AI is Impacting the Financial Industry | Piroska Nagy-Mohacsi | Technology
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How AI is Impacting the Financial Industry by Piroska Nagy-Mohacsi | Sep 30, 2021 | FinTech, Piroska Nagy-Mohacsi, Technology
The impact AI is already delivering to the financial sector is huge and unmistakable. The use of various AI applications across an aggregate of applications will save the industry an estimated $443 billion by the year 2023. Not only can AI’s impact be measured in dollars, but its use has revolutionized the way ordinary citizens interact with their own money as it relates to banks, credit unions, the stock market, and other investment activities. The same is true for professionals who work inside the finance industry. AI, along with a subset of AI called machine learning, can enhance everything from chatbot assistants to fraud detection. Task automation is another way AI is streamlining processes. Most banks managers have taken notice of what AI is already accomplishing. They realize they must move swiftly to adopt AI applications or quickly lose ground to competitors.
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10/1/21, 11:01 AM
How AI is Impacting the Financial Industry | Piroska Nagy-Mohacsi | Technology
A significant area for AI within the financial sector is where it intersects with what consumers are demanding. That mostly means getting greater power over the management of their own finances and the power to invest freely and unencumbered by complex systems. One way that AI empowers these people is by making available 24/7 chatbot service. Consumers can tap into these resources at any time to learn what they need to know to manage their portfolios. In this day of increasingly aggressive and sophisticated cybercriminals, prevention of fraud and cybersecurity have taken on an aura of urgency. The amount of losses due to fraud is expected to top $48 billion by 2023. AI is viewed as a new frontline tool to mitigate this threat. That’s because machine learning-assisted AI can constantly monitor and analyze financial activities to spot patterns and irregularities that could never be noticed by human monitoring. It can raise “red flags” that may catch bad actors before their can do damage. In the area of corporate finance, AI does a better job than people in predicting access loan risk. Also, for companies seeking to bolster their values, machine learning can make for superior loan underwriting and lower risk. AI can introduce significant efficiencies into the daily, nitty-gritty operations of financial institutions. There are dozens of mid-level office tasks that are routine and repetitive that people are currently handling. Many of these tasks can be taken over by AI. This holds the potential to save banks in North America $70 billion by 2025. Those saving will be a “drop in the bucket” as AI gets better and takes over more routine banking functions.
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