The Growing Impact of AI in Financial Services (chapter-1)

2/4/2021

The Growing Impact of AI in Financial Services (chapter-1) | by venkat vajradhar | Feb, 2021 | Medium

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The Growing Impact of AI in Financial Services (chapter-1) venkat vajradhar Just now ¡ 4 min read

Like many other technological advances, artificial intelligence came into our lives from the pages of fairy tales and fiction (think of The Vision of Oz from Tinman or Maria from the Metropolis). In the 21st century, people dream of machines that can solve problems and release the pressure that can be rapidly compounded.

Less than 70 years since the term Artificial Intelligence came into existence, it has become an integral part of the most demanding and fast-paced industries. Forwardthinking executive managers and business owners are actively exploring the use of new AI in finance and other sectors to gain competitiveness in the market.

Too often, we do not realize how much artificial intelligence is involved in our daily lives. https://pvvajradhar.medium.com/the-growing-impact-of-ai-in-financial-services-chapter-1-dc0c69921ceb

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2/4/2021

The Growing Impact of AI in Financial Services (chapter-1) | by venkat vajradhar | Feb, 2021 | Medium

AI Today: Where Its Works and What For In the travel industry, for example, Artificial Intelligence can help optimize sales and prices, as well as prevent fraudulent transactions. Also, while surfing the plane or hotel booking sites we are planning our next summer vacation, AI does provide personalized advice for desired dates, routes, and expenses.

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Machine Learning and Data Analytics in the Travel Industry Christopher Columbus, one of the most famous travelers of all time, made only 4 trips throughout his life.

In the transportation industry, AI is actively involved in the development of self-parking and advanced cruise control features known to make driving easier and safer. Experts believe the biggest breakthrough here is in the corner — autonomous vehicles or selfdriving cars are already visible on the roads.

Another bright example of the use of AI in education, where open online courses (MOOCs) such as Corsair or Linda are becoming more popular each year. They have become possible with the rise of Artificial Intelligence in education. Automatic grading has made self-instruction online courses available to anyone with Internet access — a key point in many lives and careers.

To Know About: 7 Ways AI helps to digitize the accounting & finance tasks.

Artificial intelligence saves lives, and it is not a matter of words. From robotic surgeries to virtual nursing assistants and patient supervision, physicians employ AI to provide the best care for their patients. Various administrative tasks such as image analysis and filing and charting can help reduce expensive human labor costs and allow medical staff to spend more time with patients.

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2/4/2021

The Growing Impact of AI in Financial Services (chapter-1) | by venkat vajradhar | Feb, 2021 | Medium

The growth of AI in the financial industry is a testament to how quickly the business landscape is changing, even in traditional areas. Here are some of the most popular examples of AI in finance.

1. AI and credit decisions Artificial intelligence provides a low-cost, fast, accurate assessment of a potential borrower and can lead to a wide variety of factors, leading to better informed, databased decision making. The credit scoring provided by AI is based on more complex and sophisticated rules compared to traditional credit scoring systems. It helps lenders distinguish between high default risk applicants and those who are credit-eligible and do not have an extensive credit history.

Objectivity is another advantage of the AI-powered approach. Unlike humans, a machine is not prone to bias.

Digital banks and lending applications use machine learning algorithms to use alternative data (e.g., smartphone data) to assess credit eligibility and provide personalized options.

U.S. Automobile lenders have reported success with AI for their needs. For example, this report shows a 23% reduction in board losses on AI per year.

2. AI and Risk Management It is difficult to overestimate the impact of AI on financial services when it comes to risk management. Enormous processing power allows the management of large amounts of data in a short time, and while cognitive computing helps to manage both structured and structured data, this task takes a lot longer for a human. Algorithms analyze the history of accident cases and identify early signs of future problems.

Artificial Intelligence is a powerful ally in finance when analyzing real-time operations in any market or environment; The accurate forecasts and detailed forecasts it provides are based on multiple variables and are crucial to business planning.

The US leasing company, Crest Financial, has used artificial intelligence on the Amazon Web Services platform and has seen significant improvements in immediate risk analysis, with no delay in the expansion associated with traditional data science methods.

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2/4/2021

The Growing Impact of AI in Financial Services (chapter-1) | by venkat vajradhar | Feb, 2021 | Medium

3. AI and fraud prevention For many years now, artificial intelligence has been very successful in combating financial frauds — and every year the future looks brighter because machine learning catches criminals.

AI is particularly effective in preventing credit card fraud, which has been on the rise in recent years due to the rise of e-commerce and online transactions. Fraudulent identification systems analyze clients’ behavior, position, and purchasing habits and trigger a security mechanism in the event of any irregularities and contradictions to the established cost pattern.

Banks use artificial intelligence to expose and prevent another notorious financial crime: money laundering. The machines detect suspicious activity and help reduce investigative costs on alleged money laundering schemes. One case study reported that the investigation workload was reduced by 20%.

Aggregators like Floyd (which works with financial giants such as Citi, Goldman Sachs, and American Express) take pride in their fraud-detection capabilities. Its complex algorithms can analyze interactions under different conditions and variables and build multiple unique models that are updated in real-time. Plaid acts as a widget that integrates the bank with the client’s app to ensure secure financial transactions.

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https://pvvajradhar.medium.com/the-growing-impact-of-ai-in-financial-services-chapter-1-dc0c69921ceb

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2/4/2021

The Growing Impact of AI in Financial Services (chapter-1) | by venkat vajradhar | Feb, 2021 | Medium

Artificial Intelligence

Machine Learning

Deep Learning

Finance

Banking

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