The Technocratic Rise of AI in Banking and Finance
(by Ali Raza | Influencive) – The influence of Artificial intelligence (AI) on the finance and banking sector is a hot topic in contemporary society. The most recent example of AI’s prominence in the industry was from the Financial Times, which announced that HSBC will be using an AI to help monitor its credit card customers.
One of the leading solutions in the market is FinanceAI, which is intended to provide better insights into customer financial behavior by leveraging Machine Learning and cognitive analysis so financial institutes and banks will be able to offer tailored products for their consumers. Hexatone Finance, the company that developed the product plans to expand its offering and its AI software coverage in order to analyze wider scope of sources and customer information.
This article discusses how Artificial Intelligence is influencing the finance and banking sector by providing new services that are tailored specifically for each person’s needs!
The Problem: AI and the Financial Sector
Artificial intelligence is influencing the finance and banking sector by providing new services that are tailored specifically for each person’s needs
Much of this influence originates from a lack of consumer trust in existing institutions. In a recent survey conducted by Accenture, most of the consumers said they were not confident in their ability to protect their personal information online.
Of those surveyed, only a few said they trust the institutions that collect and retain their personal information.
As technology begins to infiltrate more and more aspects of daily life, individuals’ lack of confidence in these institutions is increasingly proving an obstacle for the finance and banking sectors as a whole.
This challenge is made even greater by recent data protection legislation such as GDPR, which prohibits the use of software to automate decision-making without human intervention.
The Opportunity: AI and the Financial Sector
AI is coming up with new ways to reduce fraud and build better credit scores, such as through predictive analytics, social media analysis, biometric analysis, etc.
People are becoming more comfortable with technology while simultaneously losing trust in traditional institutions. This shift creates a unique opportunity for AI to come in and fill the gap by providing innovative services that build trust and improve the customer experience.
In the finance and banking sector, AI can help to:
- Reduce Fraud: One of the most common applications for AI in finance is fraud detection. By analyzing large data sets and spotting patterns, AI can help to identify and prevent fraudulent behavior.
- For example, one company is using computer vision software to analyze surveillance videos from bank branches and ATMs. The system uses deep learning to compare the video with information it has about a customer’s account activity, then sends an alert if it finds any suspicious activity.
- Build Better Credit Scores: Another common application for AI is through predictive analytics. This technology uses historical data and current information to predict future behavior. It can be used to provide accurate credit scores that indicate a customer’s creditworthiness.
- One company that is doing this is called FICO. They use a machine-learning algorithm to analyze more than 2.5 billion pieces of data about consumers. This information includes everything from a person’s credit history to the types of products they have been buying. By using this data, they are able to create a “FICO Score” for over 220 million Americans.
- Improve Customer Experience: A final way that AI is influencing the finance and banking sector is by improving the customer experience. This can be performed in a number of ways, such as through personalized recommendations, chatbots, and biometric authentication.
- For example, one company is using AI to recommend products to their customers. They do this by analyzing a customer’s past purchases, as well as their current and future needs. This information is used to generate individualized product recommendations.
- Another company is using chatbots to provide customer support. These chatbots are able to answer common customer questions, as well as handle more complex tasks such as account inquiries. Read Full Article >