Today, Artificial Intelligence in the finance sector, education sector, astronomy, robotics, gaming, and the list will keep on expanding has AI applications. Do you know the reason? Let us tell you in detail.
What is artificial intelligence?
Artificial intelligence ( AI) is a wide-ranging branch of computer science concerned with developing smart machines capable of performing tasks that usually involve human intelligence. AI is an interdisciplinary science with many approaches, but advances in machine learning and deep learning are causing a paradigm shift in nearly every field of the tech industry.
AI solves complex problems in a breeze which is a need of the hour. It is more accurate than humans. AI has a zero error rate. AI, along with ML and NLP (Natural Language Processing) further simplifies the tasks.
According to research, by 2030, financial institutions can save 23% in costs for AI.
Applications Of Artificial Intelligence in the finance industry
1. Fraud Prevention
In the finance sector, banks and other organizations deal with tons of data every second. Plus, they’re the ones who are responsible for managing our money. Due to all these, one problem that’s common in this sector is a fraud.
Even the smallest of the errors or fraud can give rise to huge losses and troubles. Hence, the example of Artificial Intelligence seemed like a viable option.
It is very accurate while detecting frauds, no matter how small they are. AI can also detect suspicious activities by giving an additional level of security. To summarize, AI can improve overall bank security.
A quick and precise conversation is an important aspect of banking. Combining AI with NLP enables chatbots in the financial sector to answer every query precisely.
For example, HDFC Bank’s Eva chatbot is based on the above two technologies. Hence, it can attract new clients and develop a better environment for the existing ones.
3. Risk Management
Risks and the financial sector are synonymous with each other. Both can’t exist without each other. Agree? Most of you must! And thus, proper risk management is crucial. But how?
The answer is AI. It brings about a huge difference in investment and risk analysis. For this, an AI-based system simply analyzes the risks by evaluating:
- Customer’s transaction history,
- Credit history,
- Customer’s income growth, and
- The current market conditions.
A clear analysis of the above information determines if the investment(s) can occur. An important thing to remember is that these tasks aren’t possible manually. As you can see, AI is also very important and useful in the sector of risk management in the finance industry.
4. Rules And Regulations
In finance, rules and regulations are important. The banks and organizations have to follow many guidelines. Skimping of any one of these can lead to complications. To alleviate these problems and complications, Artificial Intelligence:
- Takes into account all the rules and regulations
- Detects deviations if any
- Analyzes data, and
- Follow the rules accurately.
Hence, with AI, banks can now follow every rule and regulation, lowering the complications.
5. Customer Support
Having a responsive customer support system is vital for the success of any business. The same holds true for the financial sector. Can any of you wait for hours for a single reply? No way!
Today, AI has revolutionized the customer support system. AI-based systems are capable of assisting customers in the friendliest and quick manner.
Additionally, improved customer support systems boost the customer’s trust level, satisfaction, and contribute towards the institution’s development as well.
ZestFinance is the manufacturer of the Zest Automated Machine Learning (ZAML) platform, an AI-powered subscription solution that allows businesses with little to no credit details to determine borrowers.
The platform uses thousands of data points and offers clarity that other underwriting processes do not, allowing lenders to properly evaluate communities that are historically considered “at risk.” ZAML is an end-to-end platform that can be easily adapted and scaled by organisations.
So these are a few of the many applications of AI for finance.
There are tons of openings to use AI in financial services. It directs all of them towards industrialization and growth. AI also eliminates the urgency to include human actions and efforts. The above applications prove why AI has the potential to steady the whole financial industry.