5 Ways AI is Transforming the Finance Industry

10/23/2019

5 Ways AI is Transforming the Finance Industry - Fugenx technology - Medium

5 Ways AI is Transforming the Finance Industry Fugenx technology Oct 23 ¡ 7 min read

As global technology has evolved over the years, we have switched from television to the Internet, and today we are slowly and gradually adopting artificial intelligence. The term AI was first coined in 1956 by John McCarthy. It covers a lot of key issues, from the process automation of robotics to the actual process of robotics. Because of the amount of data these companies are dealing with, it is very popular among large companies today. Increasing demand for understanding data models has led to an increase in demand for AI. AI processes are more efficient at identifying data models than humans, which can be beneficial for companies to understand and gain insight into their target audiences. Thousands of companies around the world see AI as the next big thing for the finance industry.

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There are basically two types of AI Weak AI Weak AI can also be described as narrow AI, a system that is only set up to fulfill or fulfill a specific task. It is designed to help solve specific problems. Weak AI acts according to https://medium.com/@fugenxmobileapp/5-ways-ai-is-transforming-the-finance-industry-d114a45882b0

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10/23/2019

5 Ways AI is Transforming the Finance Industry - Fugenx technology - Medium

the stipulated rules and adheres to it. It does not exceed the stipulated rules. It focuses only on narrow tasks and does its best. Weak AI, like humans, is capable of all cognitive functions and is no different from the human mind. Although it is not defined as general intelligence, it is designed to act wisely towards the fulfillment of narrow tasks assigned to it.

The best example of weak AI is Apple’s Siri, which is managed by a substantial database of the Internet. It looks very intelligent, mainly because of the interactions it can hold with humans. Siri is also known for witty remarks, but in reality, it works in a predefined manner. When the system engages in conversations, “narrowness� is witnessed, it is not designed to respond properly.

The same is true of robots used in manufacturing companies. When customers and clients ask questions they respond very appropriately. The responses are accurate and sometimes very witty. AI is capable of handling very complex situations in nature. But their intelligence level system is limited to providing solutions to programmed problems, something beyond that.

Strong AI A strong AI, also known as a full AI, has a much bigger potential than a weak AI. It has artificial intelligence, huge capabilities, and functionality. It mimics the human brain extensively. It is so powerful that the actions of the system are exactly equal to the actions and decisions of man. It also has an awareness of power and consciousness.

Strong AI is actually a process very similar to the human mind. Artificial intelligence operates in every aspect with extraordinary ability, as the human mind. Beliefs, cognitive states, and perceptions found only in humans are programmed in robust AI. However, there is difficulty in defining intelligence accurately. As far as strong AI is concerned, determining success or setting boundaries for intelligence is nearly impossible or difficult. This is why weaker AI is better, mainly because of its ability to perform assigned tasks with optimum efficiency. Weak AI does not have to be full of intelligence that focuses on completing a specific task assigned to it. Therefore, it can be divided into smaller processes.

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10/23/2019

5 Ways AI is Transforming the Finance Industry - Fugenx technology - Medium

Artificial intelligence is the intelligence shown by machines, not by humans. Devices that use their cognitive functions detect or solve problems similar to humans, or in most cases, better. It was able to create a significant impact by doing what is deemed impossible.

5 Ways to Look at the Finance Industry 1. Risk assessment: Since the basis of AI is learning from past data; It is natural for AI to succeed in the financial services domain, where bookkeeping and records are second nature to the business. Let’s take the example of credit cards. Today, we use a credit score as a way to determine who is and isn’t entitled to a credit card. However, categorizing people as the haves and the have-nots is not always effective for business. Instead, data about each person’s debt repayment habits, the number of loans currently active, the number of existing credit cards, etc. can be used to customize the interest rate on a card, which makes more sense to the financial institution offering it. Now, take a minute to think about what system is capable of bringing the solution through thousands of personal financial records- a machine that has learned! This is where the AI comes in. Because it is data-driven and data-driven, scanning through these records gives AI the ability to recommend historical loan and credit offerings.

AI and ML are taking the place of the human analyst very fast because bugs involved in human selection can cost millions. AI is built on machine learning, which learns over time, with little chance of error and extensive analysis of data; AI has set up an automation where needed, intelligent analytical and clear thinking. Chatbots have proven themselves to be a powerful tool for customer satisfaction and help companies save unparalleled resources, time and money. Now, returning to Facebook’s efforts in designing and developing bots to negotiate the way humans do, let’s explore the possibilities of making this research a success. This new technology will not only change the way we do business, but also non-commercial activities. Fixing meeting time in the example of non-commercial activity. Bots can fix meetings by focusing on the availability of everyone involved.

2. Fraud detection and management:

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10/23/2019

5 Ways AI is Transforming the Finance Industry - Fugenx technology - Medium

Every business aims to minimize the risks around it. The same applies to a financial institution. The loan that the bank gives you is basically someone else’s money, which is why you get dividends on interest and investments on deposits. Banks and financial institutions take fraud very seriously. AI is on top when it comes to security and fraud detection. It can use past cost behavior on different transaction tools to highlight odd behavior, such as using the card from another country only a few hours after using it or attempting to withdraw unusual money into the account. It contains the question.

Another striking feature of fraud detection using AI is that the system has no desires about learning. If it raises the red flag for a simple transaction and the human corrects it, the system can learn from experience and make more sophisticated decisions about what is considered fraud and what cannot.

3. Financial Advisory Services: According to the PWC report, we can look forward to more robot-advisors. As pressure on financial institutions to reduce their commission rates on personal investments, machines and humans can work for a single down payment. Another field that is emerging is Bionic Advisory, which combines machine calculations and human insight and offers far more efficient options than their individual components offer.

Collaboration is key. It is not enough to see a machine as an accessory, or at the other end, to be ignorant. A wonderful balance and the ability to see AI as a component in decision-making is as important as the human perspective, the future of financial decision-making.

4. Trading: Investment companies rely on computers and data scientists to determine future models in the market. As a domain, business and investment depend on the ability to accurately predict the future. Machines are great at this because they can crunch huge amounts of data in a short time. Machines can also be taught to observe patterns in past data and how to replicate these patterns in the future. Although data such as the financial crisis of 2008 may be in the data, it can teach a machine to study data to find ‘triggers’ for these disorders, and also plan for the future. What’s more, depending on personal risk appetite, AI can suggest portfolio solutions meet individual demand. So a person with a high-risk appetite can calculate AI for decisions about when to buy, hold and sell the https://medium.com/@fugenxmobileapp/5-ways-ai-is-transforming-the-finance-industry-d114a45882b0

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10/23/2019

5 Ways AI is Transforming the Finance Industry - Fugenx technology - Medium

stock. Those with low-risk appetites can receive warnings when the market is about to fall and when to invest or move in the market.

5. Managing Finance: In a well-connected and physical world, financial management is a challenging task for many of us, and if we look further into the future, we can see AI services helping us manage our finances. PFM (Personal Financial Management) is one of the recent developments on the AI-based wallet. WalletStart, a San Francisco-based startup, uses AI to create algorithms to help users make better decisions about themselves while spending money. The idea behind the wallet is simple, it collects all the data from your web footprint and creates your cost graph. Advocates of privacy breaches on the Internet may find this offensive, but, in the future, the same may be the case. Therefore, it should be the preferred personal financial management to save time from making long spreadsheets or writing on paper. From a small-scale investment to a large-scale investment AI can be the watchdog of the future for financial management.

Without a doubt, AI is the future of the finance industry. As it takes progressive steps towards simplifying the financial processes for customers, it is going to replace human beings very soon and provide faster and more efficient solutions. Bots are gradually evolving as innovations are taking place in the field of AI. Companies that see this as a long-term cost-cutting investment are making huge investments. This helps companies save money on hiring and preventing human error in the process.

Although the pace at which it is progressing to develop the finance sector is still in the early stages, it can be well anticipated that the opportunities will lead to small risks, smart trading and top-tier customer experience.

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