How Fintech Companies can benefit from Artificial Intelligence and Machine Learning?
There is a cascade of AI and ML use cases across industries.
Let's learn about some exciting use cases of AI and ML for Fintech companies.
Artificial Intelligence is not a new phenomenon, in fact, it has been around for almost 50 years now, and it has evolved constantly, almost daily. As we become more efficient, and artificial intelligence learns to better emulate human intelligence, fintech companies benefit from more efficient processes and operations. As just one example, the analysis by PWC predicts that AI could contribute up to $ 15.7 trillion to the global economy by 2030. Of this, $ 6.6 trillion will likely come from increased productivity; $ 9.1 billion, for consumption side effects.
There is growing awareness globally about how AI and machine learning can provide optimal results while working in conjunction with humans. This essentially means that humans and AI augment each other’s unique capabilities; such as the innately human qualities of leadership, emotion, compassion, teamwork, creativity, and the speed, scalability, and quantitative capabilities of AI.
The growth of industrial data processing, the improvement of machine learning algorithms, the lower cost of process support, heightened competition, and exaggerated consumer demands on financial companies – all these factors have led artificial intelligence to full participation in the field of financial technology.
What’s more, it is robust enough when it comes to risks, privacy, human factors issues, and consistency in marketing strategy. Artificial intelligence (AI) technologies enable financial companies to stay ahead of the curve and deliver personalized service at a lower cost than ever before. In fact, AI can efficiently process much larger amounts of information, self-learn, and accumulate knowledge at record-high speeds.
AI is not one technology, but a complex of related well-established technologies and processes that are developing qualitatively and rapidly: natural language processing (NLP), machine learning (ML-machine learning), expert systems, virtual agents, analytical processing, a recommendation system that helps the robot to perceive, process information and act according to the type of human thinking.
Technologies such as virtual agents (computer-designed animated characters that act as online consultants), analytic identifiers, and recommendation systems (algorithms for improving products and services) are driving the innovative forward development of the industry. It also gives companies a deep understanding of service and business process development.
Benefits of AI and Machine Learning for Fintech Companies
There is a cascade of AI and ML use cases across industries. The fintech industry, in particular, can benefit enormously from integrating AI into its processes and functions. It has the potential to reduce costs, increase productivity, and contribute to the customer-facing practices of fintech companies around the world. As AI moves further into the fintech discourse, we have witnessed the emergence of some key trends.
1. Artificial Intelligence and Machine Learning for Risk Analysis
Fintech organizations are using AI and Machine Learning (ML) to measure risk and assess fraud cases. Here, analytical tools are used to collect evidence, and data is analyzed, where artificial intelligence tools learn and map user behavior. And look for patterns that can be used to identify potential fraud attempts. Over time, artificial intelligence systems can learn and adapt to eliminate undiscovered cases. And refine fraud and risk detection capabilities to better protect consumers.
2. Artificial Intelligence and Machine Learning for Customer Relationship Management
AI is increasingly used in customer relationship management. According to Gartner, by 2021 consumers will manage 85 percent of their relationships with the company without interacting with a human being. Fintech companies are also using customer-facing systems such as chatbots or voice systems capable of providing human-like interaction with consumers to effectively solve problems at a fraction of the cost, no matter the time of day.
In turn, users can make payments and transactions directly using chatbots, without the need for human intervention or downloading applications. Consumers are increasingly looking for fast and personalized experiences, that can be delivered by virtual assistants based on artificial intelligence. These wizards can even give data-backed financial tips by leveraging their mining and analytics capabilities.
Fintech companies can use artificial intelligence-backed fintech software solutions for more personalized campaigns, by leveraging anonymous, non-identifiable user behavior data to tailor relevant campaigns and offers. AI can also help with customer retention and loyalty, as it can take customer information into account to ensure that companies are offering the most suitable products at the right time. This gives businesses the opportunity to improve their services and offerings, helping customer loyalty.
3. Artificial Intelligence and Machine Learning for Checking Credit Worthiness
Lastly, AI has immense potential to make credit decisions smoother, faster, and more efficient. In addition to the robust applications of AI in risk management, financial technology companies offering credit services are using AI to quickly assess a customer’s creditworthiness. It enables companies to quickly determine whether they should be able to extend credit to that customer again, or which credit solutions might be a better fit.
It is clear that AI is enabling a metamorphosis of organizations across verticals and is taking on increasingly complex tasks. While this bodes well for the industry as a whole, it’s critical to view AI not just as artificial intelligence, but as augmented intelligence.
AI and ML can augment the capabilities of today’s workforce, but they have to work in tandem with people for optimal results. The future of AI must be mapped with human capital in mind. The collaborative intelligence of machines and humans far exceeds either of them in isolation. As AI matures and evolves, the workforce will need to keep pace in terms of skills and capabilities.
If you are looking to develop intelligent artificial intelligence software systems to boost the productivity and efficiency of your fintech company, contact us.