This century AI (Artificial Intelligence) has shifted from science fiction to the business world. Such corporations like Amazon and Netflix use AI routinely to make purchasing recommendations, iPhone users speak to Siri every day, and financial institutions give investment advice or calculate risks due to AI technologies. But these are only the first hesitant steps of AI in the financial sector.
AI (Artificial Intelligence) is not about machines rising, but about unlimited evolution speed and scale, efficient work with high data volumes and multitasking. Traditionally, the financial sector is based on high data volumes, so its automation due to AI technology is a new consistent and the expected solution.
Artificial Intelligence as a modern approach in the financial sector has a lot of advantages: precise processes help to minimize human factor; automation contributes to reduce costs; a solution of repeated tasks becomes more and more effective with its human in the loop approach used in hyper automation. Customers, in their turn, get more high quality and personalized recommendation from a support service in real time. By the way, AI technology helps to control your personal finance and investments accurately. More often AI is used for clients support automation, markets research and analysis, in algorithmic trading and fraud detection systems. It also can be used to underrate automation in insurance companies and scoring credits.
So let`s look at the real examples of the financial sector, where AI technology is used today.
Bots are the most discussed topic now, as, according to IT experts, bots will soon change the way we use our devices. Some of the financial bots help users to make purchases on the Internet, make payments, transfer money and even use Bitcoin-wallet. By the way, bots-consultants are common in the banking sphere. They can quickly answer simple questions users may have. Barclays Africa was one of the first company that began to use a chat-bot to consult clients. In July 2016, the Russian bank Tochka launched a financial bot for Facebook. This bot helps clients to look through the information of their bank accounts, find the closest cash machine in their location, call to the support service and make payments. Financial bots are a useful, convenient and rather cheap tool. Other than, to make a profit, the key aim of each firm is to satisfy its clients. So companies should take this parameter into account when launching bots.
They become more and more popular with both startups and traditional financial institutions. Automated consultants and planners help users to make right financial decisions. For example, some robots trace prices valuation on financial markets, analyze it and give recommendations to buy or sell some securities. Such companies as Bitbucket Server, Acorns, Betterment, Weathfront and Personal Capital have already implemented AI technology for their services. Ellevest is also in a list of automated investment platforms, created in May 2016 by a former Citigroup financial director, Sallie L. Krawcheck. The platform detects user`s preferences and their addiction of risks due to special algorithms and then it invests assets the way to reach short- and long-term goals.
Artificial Intelligence as a modern approach is also used in digital wallets. They study users’ habits and needs and advise them on how to manage their personal finance. Such apps as Digit, Mint, WealRo and Cleo work in this field. For example, a mobile bank in Hong Kong, Neat (launched in spring, 2016) combines AI technology and biometric security. Neat applies AI to users’ payment data, creating distinct behavioral clusters combined with geolocation to offer personalized and local offers to users.
AI implementation in marketing gives an advantage of tracking clients’ mood and behavior. Understanding of clients` reaction to the product updating is a crucial point for each business. A digital marketing and software development company Touchpoint created Radiant platform based on AI. Its aim is to predict situations that can make users dissatisfied. The platform analyzes clients’ interactions with large banks and insurance companies in Australia and New Zealand to detect consistency. Consequently, Radiant informs users about risks and suggests the ways to make them happier. The following platforms also automate marketing due to AI: 6Sense, Automated Insights and Bottlenose.
AI is rapidly developing now. Artificial Intelligence future is already here. In fact, according to Gartner research, about 1.7 megabytes of new information will be created every second for each person on the planet by 2020. But less than 0.5% of all this information will ever be analyzed. So, companies will need to analyze data faster. Financial institutes will be overwhelmed because they run on numbers and data. The existing financial tools we use today are not catering to the company’s needs anymore. We need robots to analyze high volumes of all kinds of data.
AI becomes a solution
Undoubtedly, within financial services, AI technology will allow companies to create new business models, reduce risk and costs, and increase productivity. It could also enable both large and small firms to offer financial services at a level of sophistication, customization, and scale never previously possible. However, companies should not forget about human capital that despite its imperfections has a lot of advantages.