Artificial Intelligence in Finance Industry
Post pandemic, the world will be a different place. Places, where human interaction and presence are least required, will be automatized. Artificial Intelligence, Robotics, and Cognitive Computing, together will make a great difference in existing systems of nearly every field of technology.
We all know and it is been proved until today that Artificial Intelligence is the future of technology. Machine Learning and Natural Language Processing, which are two subsets of Artificial Intelligence are helping the finance industry. Before going straight to the applications, let us see what are ML and NLP. Machine Learning is a technique to create/ develop self-learning computer programs, which can also improve it from previously received results without being changed manually. Natural Language Processing is nothing but deciphering human speech language to the version that is understood by the machines. With the rise of voice assistants like Siri, Alexa, the NLP is developing rapidly. Artificial Intelligence in Finance Industry.
let’s have a look at some applications of Artificial Intelligence in Finance Industry.
1. Fraud Detection:
Fraud Detection and Management have become a great factor of consideration due to rising cyber threats. Online banking and card payments are at a very high usage stake, hence almost every financial institution taking fraud detection very seriously. With the help of AI, banks and financial institutes can assess fraud attempts to use the cash withdrawal, or suspicious attempts to use cards. The Machine Learning technique is self-learning and evolving, so based on user behavior the system can identify if the fraud has occurred or not. Fraud Detection is an important application in Artificial Intelligence in Finance Industry.
2. Reporting and Analysis:
Ten years ago, if you were told that your smartphone or laptop will be the sole operator for banking, financial, and financial planning purpose that could be taken as a joke. But, IT, Cloud, and AI together have made this dream into reality. Your financial portfolios, bank statements, cash accounts, credit accounts, etc. After going through your account data, some apps can predict what should be your further plan for building a strong financial portfolio. Using AI, real-time Question Solver apps/ software are developed by various companies. Making portfolio reports from the acquired data and making predictions for future activities of users, has become possible due to the extensive use of Artificial intelligence in finance sector.
3. Risk Assessment:
Risk is inevitable in the business, and so is the need for Risk Assessment and Management. The high buzzed Credit Score ratings are a product of risk assessment feature developed using Artificial Intelligence. Based on the number of existing credit cards, your regular spending, your history, and the tendency to repay the credit amount, duration, and period of payments is considered while calculating the credit score, which decides the eligibility for particular card/loan approval. AI and ML are replacing human calculators which avoid chances of committing mistakes while handling a large amount of data. They can predict the risk factor in certain investments, credit, or loans. Risk Assessment is possible due to Artificial Intelligence in Finance Industry.
If we tell you, Goldman Sachs has more Software and Computer Engineers than Financial Advisors/Associates, it will be hard to believe! But, it is true. Companies are relying on data scientists and AI to determine possible patterns in the stock market. The discrepancy in data can cause a havoc situation like 2008. AI and ML can understand the history of data and accordingly they can predict patterns that can cause or result in 2008 like situations. Artificial intelligence is also helpful for personal finance trading activities in finance. Based on your trading behavior, experience, and other criteria, some software can suggest the best suitable app for personalized trading. Artificial Intelligence in Finance Industry will be useful for trading.
5. Chatbots & Predictive Intelligence:
Nowadays, if we open any website, the first thing we can see in the corner is the chatbot. It not only helps to reduce the manual workforce, but it is also suitable to perform tasks that drain the human workforce. Small tasks like, opening new accounts in banks, balance inquiry, EMI, or installment due dates can be performed with the help of conversational AI in finance.
Chatbots when equipped with Predictive Intelligence can perform decisive works by developing a certain algorithm. In addition to Voice features, regional languages will be game-changing to encourage people to use technology that makes their process easier.
These are some use of Artificial Intelligence in Finance Industry.