Artificial Intelligence (AI) and Machine learning (ML) in the finance sector encircle everything based on chatbot assistants to fraud detection and task automation with AI technology. According to the survey report, around 80 percent of banks are highly attentive to the potential benefits given by AI technology.
The decision made for financial institutions to adopt AI will be accelerated by technological advancement, shifting regular frameworks, and, most importantly, rising user acceptance rate with more accuracy. Banks using AI technology can streamline exhausting processes and improve the user experience by offering full-day (24/7) access to their financial advice to their customers.
Applications of Artificial Intelligence In Finance
With significant pressure and benefits from the tech-savvy, clever consumers with a good sense of humor, AI algorithms are being applied by financial institutions (FIs) across all financial sectors. Describing below;
- AI For Private Financing
Consumers are empty and demand financial independence and 100% security, and providing the capability to manage one’s financial health is the driving force behind the use of AI to manage private financing. Whether offering full-day financial guidance using chatbots empowered by natural language processing or personalising perceptions for wealth management, AI is a need for any financial institution seeking to be a top-tier spot in the financial sector.
For instance, In 2017, Eno launched and was the first and only natural language SMS text-based assistant offered by numerous US banks. Eno generates insights and predicts customer needs overall with twelve proactive capabilities, such as alerting customers about any fraud such as money laundering and many others.
- AI For Corporate Financing
AI is more helpful in dealing with corporate finance as it can better predict and assess loan risk factors with more accuracy. For companies seeking to increase their name and value in the global market, AI technologies such as ML help and support to improve underwriting and minimise risk factors of fraud. AI can also create the path of finding financial crime through advanced fraud detection and spot anomalous activity logins as company employers such as accountants, treasurers, analysts, and investors work toward a long-term gain in the market.
For instance, US banks are using AI both in middle and back-office applications. Many US banks unlock and analyse all the relevant data on customers by deep learning to verify bad actors or characters. It’s been using this AI-based technology for anti-money laundering and more.
- AI For User Financing
The most significant business case for AI in finance is its ability to minimise the fraud factor and reduce cyberattacks. Users look for banks and other finance sectors that provide secure and safe accounts with the security of money. Especially with online payment transfer fraud and it is expected to cross $48 billion annually by the end of 2023. AI has the power to analyse and single out irregular patterns that would be missed by humans.
For example, JPMorgan Chase is a bank taking all the benefits of AI in consumer finance. For Chase, consumer banking shows more than 50 percent of its net earnings, such as the bank having adopted key fraud detection applications for all its consumers. It has been implemented by AI-driven algorithms to catch fraud patterns every time when a credit transaction is done, which then decides whether or not the transaction is fraudulent or not.
Finance And AI: Benefits Of AI In Finance
There are numerous benefits of AI implementation in the financial sector, including task automation, fraud detection, and checking personalised recommendations are monumental in the finance sector. AI uses situations in the front and middle office to transform and develop the finance industry, including;
- Save and secure your money.
- Enabling frictionless, giving 24/7 customer engagements.
- Minimising the need for repetitive tasks or work.
- Lowering wrong positives and human error with less time.
AI algorithms such as bit iq automate all middle-office tasks. AI has the potential to save North American banks with an amount of $70 billion by the start of the year 2025. Moreover, the median potential cost savings for bank finance from AI applications is estimated at $447 billion by the year 2023. If we include front and middle office accounting, that figure is estimated to be around a total of $416 billion.
Finance And AI: The Bottom Line
It is still a subject of debate whether to include or exclude AI technology in the field of the financial sector. AI has revamped the finance sector with fluent, precise, accurate, and fast track. Finance and AI are both complementing each other and reducing the problems in financial sectors for consumers. Artificial intelligence with metaverse will play a huge role in the financial sector to revolutionise the virtual world.