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How Artificial Intelligence Can Impact Fintech Sector?
The year 2020 did bring many challenges in various countries in the world, and in various sectors. There was a great upheaval in the method of spending money, and a decline in human activity. For example, going to a bank ATM to get cash. However, when looking at the overall landscape in business, you can see a bit of a positive track in the financial sector. This article will focus on the point “How can Artificial Intelligence affect the Fintech Sector?”
Individuals who neglect the use of digital technology have no choice but to turn to online banking to complete their daily tasks during the lockdown period. This was a period when technologies like Artificial Intelligence and Machine Learning changed the way things were done in the Financial Industry.
Technology and equipment have always been a part of human life. Since our human ancestors invented fire & the wheel to today’s advanced gadgets, technology has influenced our daily life to the maximum. And yes, now programs and applications have become part of our daily lives, which think and act better than humans. Hope you got the hint already? We are talking about Artificial Intelligence and Machine Learning.
There was a time when machines with human intelligence were the object of fantasy films like the Terminator in the 1980’s. But after four decades, the fantasy has become a reality. When it comes to leveraging AI by Fin tech companies, it is heartening to see financial industry moguls working with coders & software developers to develop apps.
Is AI Reshaping the Financial Sector?
Yes, 2021 will see more AI applications in more ways than ever before. For example, chatbots will answer more customer inquiries at banks and wealth agencies; AI will be used in fraud detection tools and KYC document verification. For wealth investment firms, technology can help evaluate individual investment opportunities, generate investment portfolios, and mitigate the risks involved in adapting new technologies. Let us see in detail how Artificial Intelligence helps the Financial Sector in the following paragraphs:
A. Decision Making
Insurance companies and investment advisors, before introducing a new product or service to the market, may submit inquiries to the AI platform rather than the customer. Platforms that are loaded with customer data and have the ability to analyze and answer questions can provide recommendations to fill gaps and doubts.
This will help the insurance agent/advisor get a clear view of the customer’s expectations and decisions. They can then reframe the product or service to fit the customer’s needs.
B. AI Can Detect Online Fraud and Provide New Insights for Claims Management
The analytical tools used by banks to detect fraud have AI applications to monitor customer spending patterns and inform malpractice attempts. It is impossible for humans to analyze large amounts of data within a deadline and submit reports. However, AI due to its automation process can not only detect errors but also provide results within the stipulated time. There are several AI processes, which can modify itself to detect new patterns in cases of fraud detection. For Claims, insurance companies use a combination of AI and ML technology. A classic example of Artificial Intelligence impacting the Financial Sector.
C. Automated Virtual Financial Assistant
Investment organizations are always modifying their technology to suit the latest trends. They use automated virtual assistants to call new customers, have pleasant conversations, inform them about new products, pros & cons and finally persuade them to make an investment. However, these machines also need information about a person’s personal financial portfolio, so they can sell the perfect bonds and stocks. Have you heard of the new name given to this Virtual Financial Assistant? This is “ROBO ADVISORY”. This new app is redefining the way AI is redefining the Fin Tech sector.
Has anyone ever imagined the success of the E-Commerce industry prior to two decades? Maybe, just a few. Now, it is a multi-billion dollar industry. With many Ecommerce websites leveraging Augmented Reality and Virtual Reality to gain more customers, industry experts are focusing more and more on online security. Yes, AI applications definitely help humanity. But it is also true that hackers use the same technology to break into e-commerce websites by making use of chatbots.
Phishing has gained international recognition in recent years. You receive a call from a scammer, and then your hard earned money is scammed. Even though this is a growing threat, banks have been trying hard to provide solutions also with the same technology. They have installed an AI application on their servers to detect unfair spending activity, and if found, they can stop payments and send warning signals/messages to you and the bank. With this method, banks around the world have been saving their customers’ hard earned money.
E. Chatbots for CRM
The month is June 2021, and time flies fast, but there are still many companies asking their employees to work from home. Currently, the customer service industry is facing many challenges such as internet problems and a reduced workforce. So, businesses are looking at a more prospective way to include AI chat bots in their CRM processes. CRM chat bots have recently been highly developed and can adapt to provide answers to even the most complex questions. In addition, unlike traditional methods, where IVR was the preferred choice, chat bots can now answer customer calls directly, ensuring brand loyalty and fast solutions.
F. Meet the Compliance Guidelines
The world of cybercrime has made banks and financial institutions focus on factors such as KYC (Know Your Customer) documents. A simple change to a mobile number or a drop in the cellular connection can result in a phishing attempt. To overcome this challenge, Governments in all countries have implemented strict procedures in the investigation of KYC documents. However, it becomes difficult for international banks or institutions to verify millions of KYC documents offline. However, AI applications can scan multiple documents, detect errors and deliver accurate reports within the deadline. This helps banks identify errors in customer profiles and take necessary actions.
G. AI Can Interact With Customers on Other Platforms
In 2020, Yes bank introduced an AI robot, LUIS (Language Understanding Intelligent Service) to answer nearly 10,000 questions on WhatsApp. You can use this service to check account balances, apply for products, and submit checkbook requests.
In the future, banks may have an AI platform that coordinates with virtual assistants like Alexa, Cortana and Siri.
H.AI and Search Engines
Are you surprised by the topic of Search Engines in this article? Yes? It’s worth noting, then, that millions of people use the Voice Assistant on their phones to open websites, perform tasks, and more. So, banks are hard pressed to turn the content on their websites into keywords or long-tail sentences used by the world’s customers. Truth be told, many banks have changed their web content to match the terms customers use to open their website with a voice command on their cell phone.
The Future of Artificial Intelligence in the Fintech Sector
As per industry experts, AI-powered robots are expected to become the next customer service executives in banks. These robots can answer customer questions, guide them through various bank processes and forms, and are slated to reduce the amount of human workforce by up to 20 percent by 2027.
The Fin Tech industry has always been at the forefront of incorporating new innovations and technologies into their operations. And when it comes to using AI to improve processes and services, the results are visible. The companies given below are just a few examples of how Artificial Intelligence is helping the FinTech industry (companies & Financial Institutions) provide the best service to customers.
Popular Artificial Intelligence Applications used in Finance Industry
1. IBM WATSON PLATFORMS
This AI platform offers solutions in Risk, Compliance and customer insights for investment companies. By leveraging cognitive abilities, this platform helps identify customer behavior.
2. MICROSOFT CORTANA INTELLIGENCE SUITE
This AI platform helps small-medium-large financial companies get information about financial crimes & analyze data used to improve relationships with customers.
3. EINSTEIN’S SALESFORCE
This company helps financial advisors get information about the financial status of clients.
4. ZESTFINANCE (LOS ANGELES)
The company’s own platform, known as ZAML or Zest Automated Machine Learning, informs banks of a borrower’s credit history or information. It analyzes thousands of data and then provides accurate results. In short, this platform helps detect customers who are facing difficulties repaying loans. As per the company’s website, the platform has helped financial institutions reduce losses by up to 25 percent.
5. SCIENTIFIC SYSTEM (NEW YORK CITY)
This underwriting platform, similar to ZestFinance, provides information about customers applying for credit cards. They examine customer shopping behavior, interactions, and then offer transparent results.
6. ALPHASENSE (NYC)
Alphasense is an AI search engine used by Fortune 500 companies & investment banks. It uses NLP or natural language processing to check keyword searches with news channels, research papers, online submissions and transactions to detect changes in financial markets.
7. CASISTO (nyc)
The company’s AI platform, KAI, is popular for enhancing customer experience by offering options, solutions, and recommendations regarding financial markets.
Hopefully the points given above provide valuable information for the question – How can AI affect the fin technology industry? Please note, the fin technology as well as the AI industry will always be in an ever-changing mode. Let’s wait and see!!
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