How Fintech Industry Is Deploying AI Powered Bots
By Benjamin Roussey
Once upon a time, banks and other financial institutions were the earliest adopters of technology. In present times, though, traditional financial institutions have fallen behind when it comes to the latest technologies, paving the way for the growth of FinTech.
Simply put, fintech- or financial technology- is a new technological innovation that aims to revolution the way people bank and deal with money with the help of modern technology. FinTech competes with traditional financial systems, and several financial startups have come about in recent years that make use of this new technology.
The new technology that the FinTech industry uses has taken away a major chunk of jobs from traditional financial institutions. The most widely used technology in the FinTech industry is Artificial Intelligence (AI). Artificial Intelligence is a set of computer systems capable of performing tasks that normally require human intelligence.
AI is capable of speech recognition, visual perception, translation, and decision-making. Besides AI, there are other technologies like big data, machine learning, and neural networks that help compress huge sets of data into a more manageable form.
Needless to say, financial startups are racing ahead of traditional institutions by using these technologies. Processing the huge amount of customer data is time consuming, but with AI-powered bots, the process is not only simpler, but also more accurate and free from human error.
The following are ways in which FinTech startups are using AI to revolutionize banking.
Decision-making
Every industry knows how painstaking the decision making process can, especially where different levels and hierarchies are involved. AI powered bots lead to smarter decision making that’s less time consuming and free from error. This includes the use of AI powered bots to make more accurate investment decisions, the use of neural networks to forecast stock performance with the analysis of past data, and the use of simulation models to analyze customer data and come up with better plans at lower cost.
Customer service
The number of customers is one of the highest in the financial industry. Huge amounts of data needs to be handled within a specific time, customer requests have to be taken care of, and transactions have to be dealt with swiftly. With changing times, the bar of customer service is rising. AI powered bots, also called chatbots, are being utilized by FinTech companies to deliver faster and superior customer service.
Chatbots are like virtual assistants that can be made to perform any task, including improved customer support, managing multiple bank accounts, checking account balance and transactions, and automated payment and transactions.
Fraud detection
AI has been used since a long time to detect and prevent fraud, and the same mechanism is being used by the FinTech industry. AI powered tools collect evidence and analyzes data, then monitor behavioral patterns of users to identify fraud attempts. Large financial organizations have used AI for a long time to study card and transactions patterns to detect and prevent fraud. In fact, experts believe that by using AI powered bots, companies can reduce the chances of security breaches.
Wealth management
There is a growing rise of the use of AI powered tools in wealth management. Since a large amount is invested in stocks and assets, wealth management requires more attention and meticulousness than any other banking function. AI is being used by both traditional financial institutions as well as FinTech startups to remove human error from wealth management, pay more attention where it is needed, and interact with customers to better understand their needs.
AI also eliminates higher costs and gets a large amount of work done quicker and more efficiently. Smart wallets offer customers the convenience of managing their wealth and save their money better. Too bad we could not have had this technology managing Fannie Mae and Freddie Mac back in 2007 and around that time since Barney Frank ran those institutions into the ground and then lied about it. So much for human superiority!
Virtual financial assistants
Also called Robo-Advisors, virtual financial assistants have been assisting users in making the right financial decisions for a long time. Too bad no one told Hollywood not to come out with Zoolander II, Django Unchained, Dreamcatcher, or Jurassic World since those movies were terrible but this is another topic.
From analyzing financial trends to tracking the rise and fall of stocks and bonds prices, automated financial assistants can do it all. They combine this data with the user’s personal portfolio and financial goals to make proper recommendations. These automated systems are increasingly used by FinTech companies to provide users with quicker and more efficient services.
Predictive analysis
AI is being widely used in predictive analytics to predict market trends. Predictive analytics can reveal a lot about the future – from what customers are going to buy to how the stock market will perform. AI powered bots can make these predictions more accurately and lead to better decision making.
Love it or hate it, AI-powered bots aren’t going anywhere anytime soon. They are here to stay and make a lot of jobs easier in the financial industry. When used together with the human experience, AI can improve customer satisfaction, management, and reduce costs. In short, AI is helping FinTech companies race ahead by analyzing large volumes of data faster, and getting actionable results in a shorter time.
Now only if someone could figure out how to convince our politicians that money does not grow on trees! Printing out fake money to pay for hair brain ideas is not feasible but this is another subject.