The rise of Artificial Intelligence (AI) is altering the face of the financial services sector. According to a study released in March 2021 by the Report Linker in March 2021 the world market for AI is expected to be used in financial services is expected to grow by . FinTech market is expected to expand by a compound annual rate of 23.17 percent between 2020 and 26 to increase to USD 26.67 Applications in 2026.
In the same document, Artificial Intelligence is further in its path to becoming a standard feature in the financial sector in just a few years. Based on a study carried out by the Cambridge Centre for Alternative Finance (CCAF) in 2020, 83% of the respondents to the study utilized Artificial Intelligence in some form as a result of FinTech firms being a little ahead of the curve in the use to the new technology.
In light of the many advantages associated with Artificial Intelligence for FinTech businesses as it relates to efficient processes, automated manual tasks, etc the need for AI solutions from FinTech companies for software development is rising.
If you’re thinking the possibility of implementing AI to improve your financial services company, then read this article to discover the many applications of AI in the FinTech sector that could lead your company on the path to unimaginable growth.
AI to Finance – – Business Applications and Benefits
It is the fintech industry utilizing AI in fields like Risk management, automated trading, and fraud detection to identify opportunities to increase revenue automate manual processes reduce operating expenses, and so on.
According to Statista Statista, of the many applications of AI in the field of financial services fraud detection is by far the most significant application followed by analysis of finance processes and cybersecurity.
Learn more about the main benefits and applications that come from Artificial Intelligence in the FinTech sector.
Fraud Detection & Prevention
in the past businesses had a strategy to stop fraud, using rules written in hardcoded format by experts in the domain. But the risk is in the possibility that criminals could be able to discover the rules and take advantage of the system.
Artificial Intelligence helps detect and eliminate fraud by analysing the buying habits of a consumer and issuing an alert when something appears unusual or does not match the typical spending habits of the client.
Risk Assessment & Management
The FinTech sector uses AI to evaluate the risk of a person or a business. For example, Artificial Intelligence and Machine Learning (ML) algorithms are used to determine the eligibility of an individual for loans and also provide tailored alternatives, which makes the whole process more efficient and more precise.
AI in finance can also be utilized to manage risk. The technology can handle huge quantities of unstructured and structured data to be handled in a very short amount of time. This task could take a lot of time for a human being to accomplish. Its AI algorithms also study the risk history and detect early indicators of future potential issues.
Automatization of Manual Procedures
AI automatizes mundane and repetitive tasks like reviewing documents or pulling data from apps, which allows financial professionals to concentrate on tasks that are more important, like developing stronger relationships with clients.
For example, when the customer fills out credit card applications the information is added to the system, analyzed and confirmed by professionals. It is evident that no one likes performing these routine tasks. This is the point where AI can help to speed up the process by cutting down on the time it takes to approve an application and improving accuracy by making sure that human error is not a factor.
Credit Scoring
A lot of banks and financial institutions are involved in lending money. In the same way they have to evaluate the creditworthiness of any potential client or another business.
In the past, these decisions were taken by analysts after collecting relevant information. With more advanced techniques in comparison to scoring methods of the past, the AI-enabled systems allow for quicker and more accurate assessment of a prospective borrower.
Cybersecurity
The risk of cyberattacks in today’s enterprises is vast and is expected to expand rapidly. This implies that improving an organisation’s security posture requires more than just human intervention.
AI technology draws information from the past and the present to identify numerous cyber threats including malware threats to attack by phishing. With the help of various algorithms AI systems can also be trained to perform patterns and recognize the most minute ransomware threats.
Personal Banking
Artificial Intelligence technology has reduced the amount of time spent calling the number of people waiting to speak to the customer service rep. Thanks to chatbots that are AI-powered or virtual assistants customers are able to check their account balance, plan payments and receive personalised banking tips from virtual assistants in minutes.uploadarticle.com
Trading
Organisations within the FinTech sector are making use of AI applications like smart wallets to track the behavior of users and identify patterns. Based on this, suggestions are made for savings, micro-investing and many more. This kind of AI tools help make FinTech much more available to customers.
AI and Finance Future Outlook Future Outlook
“AI revolution “AI revolution” is affecting in the FinTech industry in a huge way, and is expected to be so in the coming years. According to Forbes five percent of the financial service companies with more than 55,000 employees have already implemented the technology to improve their operations. Additionally, 70% of financial institutions use ML to forecast the timing of cash flow events, adjust credit scores, and identify fraud.
Thus, implementing Artificial Intelligence technology is the requirement of the day for all financial service businesses. It’s not just an option, but also an effective strategy to survive for your company.
You could think about the possibility of implementing AI for your business by employing internal resources. But, the process could be difficult beginning with choosing the appropriate Artificial Intelligence tools to setting the proper data inputs.
To propel your business to a new level by implementing AI-powered solutions, it is recommended to work with a reputable and experienced FinTech software development firm who can not only design solutions, but also bring to the team suggestions for an AI strategy that is best suited to your business’s financial needs.
