Role of AI in Banking and Finance Sector
With growing technology around the world banking sector has also adapted to new means i.e. the usage of artificial intelligence. The usage of artificial intelligence has helped the banking sector in in various ways like enhancing customer experience, speeding up the processes and making all the procedures much safer, faster and efficient in countless ways.
Artificial intelligence helps firms to learn from old data and to analyse it so that it can be useful in decision making and it may also organise the data for easy accessibility. Companies have used these advancements to strengthen their activities and make accurate decisions. Some ways in which AI is transforming banking and finance sector are: Risk assessment i.e. AI analyses the risk associated with lending money to different borrowers by the risk ; Fraud detection and management i.e. AI point outs the odd behaviour of borrowers which may eventually lead to fraud ; Financial Advisory Services i.e. Robo-advisers have been developed which helps to make better decisions about investments whether be it for an individual or a firm ; Trading i.e. One can rely on AI to make decisions like when to buy, hold or sell investments. Investment companies count on AI to know about future patterns in the market ; Managing Finance i.e. Recent AI developments like wallet, a San Francisco based start-up helps people to manage their finances.
So, as we can see AI is transforming the way in which we deal with money. People are now relying more on AI based decisions because it analyses huge set of past data and determines market patterns, like when the economy will go into recession or boom and tells them when to invest and helps them find their ideal investment, which will give them expected rate of return. Even big companies and banks depend on AI based decisions because they help them reduce their default rate.
Companies like Ayasdi, Simyudine Ltd., Socure Inc., Datavisor Inc., JP Morgan Chase, Feedzai and Zestfinance Inc. have big impact in the field of finance by providing machine intelligence to leading financial institutions. These companies are developing more technologies which is aimed at helping this sector even more.
Examples of how AI companies are helping financial institutions:
1. Datarobot: A software which helps financial institutions to make quick and accurate decisions on issues like digital wealth management, direct marketing, deciding the credit limits of borrowers based on their credit scores etc.
Crest Financial, is a lending firm which uses Datarobot’s software to make various decisions.
2. Underwrite.ai: It assess the chance of fraud on loan applicants by applying machine learning to govern good and bad applicants by finding patterns. It claims that it can reduce default applicants by 20%- 25%.
M-Pesa, a mobile phone money lender introduced by Vodafone uses underwrite.ai to reduce default applicants.
3. Zestfinance: It introduced Zest Automated Machine Learning, a platform which helps financial companies by providing them transparency about borrower’s credibility to reduce the risk of fraud.
Thus, we can say that AI has helped banking and finance sector in various ways by making it faster, much more secured and efficient. It has helped the industry to meet the demands of its customers, who want smarter, more advantageous and safer ways to access, save and invest their money.