Artificial intelligence is the new blueprint in which the fintech industry is evolving. Nevertheless, it is clear that despite the efforts of Fintech to promote the merits of AI to companies, many of them still do not use it due to their inability to visualize, integrate and deploy these new technologies.
By combining artificial intelligence and machine learning, companies can identify untapped possibilities to accelerate their daily activities and processes. AI for FinTech allows customers to make more relevant decisions and gain efficiency. At the same time, emerging technologies will bring new growth opportunities that will promote the development of trade around the world, allowing companies to thrive in an international environment.
According to research, 63% of clients worldwide have used one or more fintech platforms. Companies in the financial sector can leverage artificial intelligence to analyze and manage data from multiple sources to provide valuable insights. These innovative results help banks overcome the challenges they face on a daily basis while providing day-to-day services, such as loan management or payment processing. Now, let us take a look at some use cases of AI-driven FinTech innovation and the key benefits FinTech companies can derive from this technology.
How Artificial Intelligence Change FinTech?
Artificial intelligence can revolutionize financial services and the way they are delivered to customers. AI for FinTech could lead to better-informed and personalized products and services, as well as improved customer service, internal process efficiency, security, and risk reduction.
Stronger Security
AI in finance is powering many solutions aimed at improving security precautions. For example, banks offer applications accessible only by facial or fingerprint recognition, thanks to artificial intelligence.
Some experts claim that AI-based security solutions will soon replace passwords and usernames. However, voice recognition, facial recognition, and other biometrics can add an extra layer of security and are more challenging to bypass than traditional passwords.
AI for FinTech includes behavioral solutions and has the potential to revolutionize the financial industry. AI can track a customer’s interactions with transactions and predict their behavior pattern. Suppose a customer tries to withdraw from his account in a location outside of his usual location several times in a row. AI-based machine learning will detect this activity as possible fraud and block it.
Improved Customer Support with AI for FinTech
The obvious place where we can see the impact of AI on FinTech is in customer service. AI interfaces and Chatbots communicating with clients and answering questions will significantly reduce front-office and helpline staffing costs. According to a survey published, AI for FinTech technology can help the finance sector save 22 percent operating costs, over $1 trillion.
Clients are accustomed to receiving speedy responses at any time of day, thanks to artificial intelligence’s significant gains in customer service for banks and Fintech. To answer queries and ease transactions, financial institutions must be available 24/7. If you don’t respond to customers quickly, you risk losing their business to the competition.
Complex sentiment analysis, which focuses on understanding the customer’s experience, finding deficiencies, and training chatbots to address those concerns, continues to improve fintech customer service. AI-based tools are making communication between customers and Fintech easier and more accessible. A more profitable firm results from happier consumers and happier customer service representatives.
Enhancing Transactions
The fintech industry was born as a result of AI, making data aggregation and digital transactions a new way of life. In terms of gathering data, analyzing information, securing and enhancing transactions, generating customer-centric products, and streamlining procedures, AI is becoming a crucial aspect of the fintech sector.
AI for FinTech has the ability to improve finance as well, with great potential for improving how we analyze and process transactions. As regulations become more complicated and the fight against fraud intensifies, AI could be the key to more efficient and safe global transactions.
Personalized Services
When customers download banking apps, AI systems gather and evaluate their data. Based on the data, relevant pre-approved items and individualized financial advice can be recommended. Clients can use AI for FinTech to track their personal financial objectives and expenses.
AI systems will only get better at reading client data and offering personalized experiences because they are self-learning. To generate useful information, AI models evaluate voice and speech characteristics and are able to distinguish true patterns from useless conversations. AI-assisted transcript analysis can even forecast a customer’s mood and recommend remedies to them.
Client Risk Profiling
Potential clients are often missed by established financial industry players in traditional banking. Many FinTech companies are offering a more practical way to apply for a loan without providing credit history for a bank to assess. In addition, there are firms that use artificial intelligence to mine data from potential borrowers to build a soft credit score that gives them a glimpse into their creditworthiness.
For those who want to apply for a loan but don’t have a credit history to look at, AI for FinTech is bridging the gap. Potential borrowers sign up and give the app permission to mine personal data from the web browser history, social media, geo-locations, and other sources to create a picture that banks can use to determine whether they are creditworthy or not without using any of the usual credit scoring metrics.
Algorithmic Approvals
For decades, huge trading businesses and institutional investors have used algorithm trading to execute stock market deals using pre-determined, rules-based instructions. In recent years, AI has made significant progress in introducing algorithm trading to people. Consumers now have access to user-friendly mobile apps that allow them to trade stocks and shares using AI-powered decision-making.
AI for FinTech now has been revolutionizing the trading desk and assisting in the real-time crunching of millions upon millions of data points, all while learning and picking up on insights that traditional statistical models missed.
Final Words
AI for FinTech is used for a wide range of purposes, including lending decision making, customer support, fraud detection, credit risk assessment, insurance, wealth management, and more. Modern Fintech companies are turning to artificial intelligence to improve accuracy, efficiency, and speed of query resolution.
FinTech uses AI to drive innovation, resulting in more personalized, rapid, and secure services with higher consumer satisfaction and global reach. Artificial intelligence is thus here to stay in the financial markets!
CCom Digital can help you learn how to take advantage of AI for FinTech. Our team of experts can provide you with a solution that can fit your organizational needs.