The world is becoming more technologically advanced each year. Scientists, mathematicians, and philosophers are constantly trying to come up with ways not only to do things faster but to be as accurate as possible.
Many industries heavily rely on artificial intelligence to offer customers the most personalized experience possible. AI is now used not just in the technological sector, but also in healthcare to provide tailored treatment plans, as well as in retail to provide customers with recommendations according to their purchase history.
Chatbots are used by some of the biggest operating systems in the country. These chatbots allow companies to use voice recognition and language processing to assist a larger number of customers and decrease the day-to-day call volume. The finance industry has also begun to reap the benefits of AI and is providing customers with a personalized financial experience.
Benefits of Using AI in Financial Services?
There are several benefits of implementing AI in financial services:
1. Lending Decisions
AI is much more reliable when it comes to making credit decisions for potential borrowers. In the past, customers would fill out an application and would have to wait anywhere from 7-10 business days for a decision to be made. The decision would primarily be based on one’s consumer report; however, due to the technological advances of AI, lenders not only provide instant credit decisions but decisions that are more reliable than human calculations.
AI has the ability to consider a wider range of data when measuring the risk of an applicant. More and more financial institutions are incorporating artificial intelligence in order to reduce the risk of default loans. The more accurate you can be on one’s likeliness to pay back their loan, the less money you are likely to lose.
2. Fraud Prevention
As the world becomes more technologically advanced, hackers are finding new ways to breach financial systems. Artificial intelligence can be trained to identify the patterns of fraudulent and non-fraudulent transactions in order to immediately alert customers of fraudulent activity.
Financial institutions can also reduce the risk of incorrectly flagging accounts by monitoring their spending habits over the course of time. A person who is spending more than usual around the holidays will be less likely to be incorrectly flagged for fraud.
3. Financial Advising
Being able to personalize your financial experience is highly important to today’s consumer. When it comes to things like building one’s credit score, the experience needs to be personalized in order to be effective. AI can look at one’s credit health and make suggestions on how to increase their credit score.
Companies such as Bankrate and Credit Karma are already making use of AI by giving customers the opportunity to identify their financial goals and build a personalized financial plan. Someone who is wanting to buy a house can have their financial profile scanned and a personalized chatbot will tell them the exact steps they need to take to increase their creditworthiness.
4. Personalized Banking
AI can also be used to create a personalized banking experience. By assessing a customer’s spending habits, artificial intelligence can create a personalized budget or spending graph. This graph allows the customer to see the areas that they are spending the most in so that they can make better financial decisions or reach savings goals. Payment reminders can be set up and a personalized bot will help to ensure that bills are paid on time. Banks like PNC and Wells Fargo already offer these “virtual wallets” to their customers.
5. Stock Market Forecasting
Because of its ability to identify patterns in such a short period of time, AI can be a powerful tool in the stock market. It not only allows for a more accurate prediction of the direction of a stock, but it adds speed to the trading process.
Artificial intelligence is dominating in Wall Street and in 2017, the first 100% Al powered Equity Trading Fund was introduced, and by 2018 shares had risen by 20%. Despite these milestones, AI is not perfect and is constantly learning from its mistakes in order to produce the most accurate information.
As artificial intelligence models continue to be adopted within the finance industry, those of you who have not incorporated AI will soon find it difficult to compete. AI offers the ability for financial sectors to take on more at a faster pace.
These companies have higher customer satisfaction ratings, are saving money, and are leading in the finance industry. No matter what financial sector you are in, there is an artificial intelligence program that can be tailored to your company’s needs.