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The impact of AI on financial services

Author: Kishan Singh
by Kishan Singh
Posted: Feb 13, 2020

India today is at the cusp of paradigm change in its growth and its position in the world. We must act decisively to capture this opportunity. We need to think big and scale up rapidly in each and every area, be it education, infrastructure, finance, medical or technology. And after the introduction of a cashless economy, one needs to think about the ways, he/she can adopt to adapt themselves in the ever-changing environment. In order to be the change that we wish to see in the world, we need to be accustomed according to the flowing waters of technology.And since talking about the technology, let’s not forget the technology that helps your cellphone predict your next word while writing an email to a colleague. Yes, you guessed it correct, artificial intelligence has completely changed the way humans interact, the way humans travel, the way humans learn and of course not to mention, the way humans work. Since AI has already acquired the major expanse in different industries, almost every he and she knows what AI is about. Then too, we shall have a zest of this game-changer.What is Artificial Intelligence?In the simplest language, intelligence exhibited by machines is called artificial intelligence. Talking in terms of computer science, an ideal intelligent machine is the one which behaves rationally while perceiving its environment and takes actions accordingly, that it maximizes the chance of success. Capabilities currently classified as AI include successfully understanding human speech, competing at a high level in strategic games system, self-driving cars and interpreting complex data. But this is not where AI ends. Just as a river flowing on and on, AI is also developing at a non-stoppable rate. And to experience that, let’s wait and see what all heights do AI achieves in the near future. AI and Financial services:Imagine what will happen if two superpowers of the globe come together towards developing the world. This is what is happening when "artificial intelligence" combines with "financial services"….BOOM! More and more people need finance to execute a plan and the same people also do not want to work on their own. This is where AI and financial services serve best as a couple.Let’s rundown to see in what ways is AI assisting financial markets along with the companies that are providing such support systems.

1. AI & Credit Decisions:With so many of life’s important decisions hanging on credit availability, the recklessness approval process for credit cards and loans is more important than ever. Artificial intelligence support systems are assisting banks and credit lenders to easily calculate the credit scores of the borrowers and forecasting the future course based on past evidence, thus helping them to make smart underwriting decisions by utilizing a variety of factors. Here are a few examples of the companies helping the financial industry rethink their underwriting process: ZESTFINANCE, Los AngelesZestFinance introduced a new platform namely Zest Automated Machine Learning (ZAML), which is an AI-powered underwriting solution that helps companies to assess borrowers with little or no credit history with them. DATAROBOT, BostonDataRobot helps the financial institutions to build accurate predictive models quickly that enhance decision making around issues like fraudulent credit card transactions, digital wealth management, direct marketing, lending, blockchain, etc.SCIENAPTIC SYSTEMSScienaptic Systems helps banks and credit institutions by providing a more transparent underwriting platform. Scienaptic’s Ether connects myriad structured and unstructured data, transforms the data, learn from each interaction and offers contextual underwriting intelligence. 2. AI & Managing Risk:More profit calls for more risk. But this can be deadly if not given proper attention. Thus, artificial intelligence is needed to predict the forecasts accurately and to create more exact and nimble models.The companies providing such help to financial markets is as follows:KENSHO, CambridgeKensho provides machine intelligence and data analytics to leading financial institutions which offers analytical solutions using a combination of cloud computing and natural language processing to find answers to complex financial questions. AYASDI, Menlo ParkAyasdi creates cloud-based and on-premise machine intelligence solutions for enterprises and organizations to understand and manage risk, anticipate the needs of customers and even aid banks in the anti-money laundering process. 3. AI & Quantitative Trading:It implies identifying patterns using large data sets that can further be used to make strategic trades. AI-powered computers can analyze large, complex data sets faster and more efficiently than humans, making trades better and automated.Examples of companies that are helping financial institutions by automating their trades are as follows:ALPHASENSE, New YorkAn AI-powered search engine for the financial industry, AlphaSense utilizes natural language processing (NLP) to analyze keyword searches within fillings, transcripts, research and news to discover changes and trends in financial markets, serving clients like banks and investment firms. KAVOUT, WashingtonAn AI-powered stock ranker, Kai Score (one of the Kavout’s solutions) analyzes massive amounts of data and condenses the information into a numerical rank for stocks. The higher the Kai Score, the more likely the stock will outperform the market. ALPACA, CaliforniaThe deep Learning technology of Alpaca identifies patterns in market price changes and translates its findings into multi-market dashboards. Thus providing short and long term forecasting applications.

4. AI & Personalized Banking:Who wants to visit a bank every weekend and withdraw cash or get assistance after standing in a long queue with sweat all around? Certainly, no one does. Hence, we need to call the bank at our homes and provide us with the facilities that require no efforts. This is where we encounter artificial intelligence. AI assistants such as chatbots use AI to generate personalized financial advice and natural language processing to provide instant, self-help customer service.Let’s know to take a look who brings banks to our homes.KASISTO, New YorkKasisto has created a conversational AI platform that has improved customer experiences in the finance industry and has reduced call center volume by providing customers with self-service options and solutions. ABE AI, OrlandoAbe AI provides virtual financial assistance ranging from simple knowledge and support requests to personal financial management along with conversational banking that integrates with Google Home, SMS, Facebook, Amazon Alexa, web and mobile to provide more convenient banking to customers. TRIM, San FranciscoThe smart application of Trim acts as a money-saving assistant that connects to user accounts and analyze spending. This app can cancel money-wasting subscriptions, find better options for services and even can negotiate bills. 5. AI & Fraud Detection:As we move towards digitizing all the transactions, the threat to fraud increases. The need to ramp up fraud detection efforts is, therefore, a necessity for any bank or financial institution, and artificial intelligence is playing a key role in improving the security of online finance. Below are a few examples of companies providing AI-based cybersecurity solutions for major financial institutions. SHAPE SECURITY, CaliforniaShape Security has high order machine learning models that effectively distinguish between real customers and bots. It also uses AI-enabled bots to detect compromised login credentials, alerting both customers and companies to security breaches instantly. DARKTRACE, CambridgeThe company’s AI-based platform analyzes network data and creates probability-based calculations, detecting suspicious activity before it can cause damage to financial firms. VECTRA, CaliforniaVectra, the company behind Cognito, has an AI-based platform that automates threat detection, reveals hidden attackers, accelerates investigations after incidents and identifies compromised information. How will AI perform in financial markets in the future?The financial industry is reshaping its business landscape now and then with new updates in artificial intelligence. With blockchain and cryptocurrency, there are high hopes for increased transactional and account security. But, following the rule of nature, as transaction automates, transaction fees will reduce drastically due to lack of intermediary. All kinds of digital assistants and applications will continue to perfect themselves with the help of cognitive computing, making personal finances exponentially easier to manage.Better and improved customer care with sophisticated self-help VR systems is expected to be experienced. A new level of transparency will stem from more comprehensive and accurate know-your-client (KYC) reporting and more thorough due-diligence checks. As can be seen clearly, AI has greatly contributed to financial services and its multiple benefits are hard to ignore, one can say with the increasing developments in AI, we will soon encounter an enormous revolution in financial services too.

About the Author

Https://www.qversity.com/course/fundamentals-of-artificial-intelligence Mr. Kishan Singh

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Author: Kishan Singh

Kishan Singh

Member since: Jan 28, 2020
Published articles: 1

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