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We have seen the transformation of traditional financial services into ‘Fintech’ in the last few years, thanks to the disruptive technologies – blockchain, Internet of Things (IoT), and Artificial Intelligence (AI). Fintech apps are now the new normal in the financial services domain. Especially, the role of AI in the field of fintech is mind-blowing. Do you know that financial companies are increasingly investing in AI-based fintech product development and acquisition? According to a recent Research and Markets forecast, AI in fintech investment is expected to reach USD 22.6 billion worldwide by 2025!
Artificial intelligence has revolutionized the fintech market and its applications are in a variety of use cases. These use cases are an excellent example of the need for AI in the finance industry. In this blog post, we will discuss the latest fintech and AI trends. Let’s have a look at the top six fintech AI use cases.
Financial frauds are one of the major concerns in the banking industry. Machine learning has helped to understand and interpret a large amount of data and find fraudulent patterns in it. ML-based fintech applications and services can therefore not only identify fraudulent transactions, but they can also help to detect and predict threat actors. The techniques involve both pattern mining and anomaly detection. These techniques have made fraud detection and protection swift and effective. Hence, AI is helping financial firms in identifying and preventing financial frauds.
The churn prediction is a game-changer for financial companies. Fintech firms focus more on keeping loyal customers than on making new ones. Due to increasing competition in the financial sector, customers tend to change their loyalties. Churn is the term to specify such customers. Churn prediction solutions take customer’s data and find behavioral patterns of the users. These AI-powered predictions can help firms in finding if their loyal customer is going to churn. Financial firms can make timely amends to keep their loyal customers by using churn prediction solution. Therefore, churn prediction is one of the most emerging products of AI in fintech.
Credit Scoring and Loan prediction
Artificial Intelligence can simplify the process of decision making for financial firms, such as lending loans to clients by finding patterns from historical data. Machine learning algorithms can help in profiling clients based on their risk score. Credit scoring is, therefore, rated as one of the top fintech technology trends.
Customer Relationship Management (CRM)
Customer Relationship Management (CRM) is a fintech app that allows financial companies to build strong relationships with their customers. CRM uses AI to track the behavioral patterns of the customers. This helps in providing content that individual customers like. This personalized experience for the customer helps in making strong bonds between the customers and the company. CRM solution providing companies are making a big mark in fintech, generating high revenues. Therefore, CRM is the leading AI and fintech app this year.
Algorithmic trading is also one of the top products of fintech software development companies.
As the name suggests, algorithmic trading helps investment companies identify the trading trends and performance of financial assets using machine learning methodologies. A large amount of data is analyzed from innumerable resources – news, blogs, research, technical reports, and SEC filings. This helps in predicting the performance of a financial asset. Hence trading decisions are made through machine learning and AI models.
Regulation Technology (RegTech)
Regulatory and compliance has always been a daunting task for financial institutions and organizations. AI and machine learning fintech solutions have made this task simple for them. The AI-powered RegTech automates the communications compliance lifecycle, reduces risks, makes regulation efficient, and ensures profits. These features make RegTech an amazing AI solution for financial firms.
The benefits of AI in fintech cannot be undermined. AI is helping the fintech industry to grow as a technology powerhouse. The disruptive technology revolution has given rise to many AI fintech companies and startups. Businesses need to evolve with the constantly evolving technology landscape. Fintech software development companies must incorporate novel AI trends in their solutions to stay relevant in the market.