Artificial Intelligence (AI) has a lot to the finance industry through self-learning algorithms that can help both the financial services industry as well as its customers. Here are some of the key areas in financial services where AI has already started transforming legacy systems.

Investment

AI can dig deeper to get better insights into the existing data and newer data to look for trends and patterns leading to delivery of a service to a customer. Robo-advisors are disrupting the investment market with AI-powered platforms automating asset management, advisory and underwriting. Robo-advisors has radically reduced the role of financial advisors in the investing process. Investors no longer have to be ultra-wealthy or pay hefty fees for something they might not need. Robo-advisors simply gather data about the investor’s financial goals, current financial status and the level of risk they’re open to, and then feed this data into pre-built algorithms. Investors are then provided with data-driven investment advice with all the information needed to make an educated investment decision. Robo-advisors can even automate the purchase and management of investments.

Customer service

Chatbots with conversational AI abilities were one of the first steps towards AI adoption in this industry and are being used by banks quite widely today. Through big data and machine learning, chatbots know how to respond to customer’s questions. These queries, among many others, include onboarding concerns, transaction-specific questions, simple to complex service requests, escalating issues and product recommendations. AI can also expand the range of offerings based on customer preferences for financial spending. While the early versions of chatbots have only been able to answer basic questions, future versions are being designed to become full-service virtual assistants that can make payments and track budgets for customers.

Fraud and risk

AI has proven especially useful in the area of detecting fraud, sometimes even before it happens. Over the years, AI tools have been fine-tuned and evolved using algorithms that can rapidly mimic the thought process of a human analyst to review each transaction in every portfolio. AI enables banks to not only be alerted to potential fraud, such as loan defaulters but also gives them a percentage that depicts the likelihood of a card ever becoming compromised.

Regulatory compliance

Monitoring changes and keeping pace with a very dynamic regulatory landscape has always been challenging for financial institutions. AI can “learn”, remember, and comply with all applicable laws from KYC and anti-money laundering regulation to laws governing asset management.

Stock trading

AI trumps human intel when it comes to big data and pattern recognition, especially since AI can analyze tons of data and cull out insights in a fraction of the time it would take even the most capable human mind. Financial analysts, investors and other key members of stock trading have embraced AI as a tool for predicting market movements. AI can evaluate public remarks, pick up on sentiment analysis etc., and then compare this data with historical data to predict stock performance with near certainty.

Even now the full impact of artificial intelligence in financial services is to be seen. AI provides a great scope in fine-tuning existing products and services, as well as an opportunity to develop newer offerings based on customer insights and industry data. From the customer’s perspective, the benefit lies in increased account protection. The same AI tools that are mining big data storage systems for actionable financial patterns will also spot irregularities and problems and alert customers.

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About Author

Tamil Bharathi is the Client Advisor at Zuci. He specializes in advising and offering critical customer-centric solutions to new and existing customers for the best end-user experience. He is a fun person with a great sense of humor. Check him out at Tamil Bharathi.