There’s a common belief that times of crisis bring great change. With the COVID 19 outbreak shaking the world to its core, we could be about to see a different global landscape once we return to some kind of normality.
The financial industry is, of course, one of the most susceptible areas to such change. It’s also heavily intertwined with the technology sphere, and rapid technological progress normally finds its way into financial services before many other sectors.
With 5G the buzzword on everyone’s lips, artificial intelligence (AI) and machine learning (ML) are two areas that will benefit greatly from the technology — and also transform financial services as we know them. Here’s a look at how.
Enhanced customer service
Waiting in line in a bank to see an advisor could become a thing of the past with the rise of Fintech banks. AI promises to accelerate the use of digital tools to dramatically improve customer experience, and banks will be keen to adopt them in the race to be the people’s favourite.
Chatbots, for example, already save a lot of human effort in identifying customer problems and offering advice, but they’re not always accurate. AI will take them to the next level, using instant language processing to offer tailored solutions immediately, and cutting down on errors and glitches that often hinder the problem-solving process.
There are even signs of ‘robo advisors’ on the horizon: software with the ability to deal with complex banking issues and offer advice on concepts such as investment portfolios. So, instead of a human financial expert talking you through your saving options, you’ll effectively deal with a robot instead.
Such an example of this is KAI, a conversational AI platform that is designed to enhance the customer banking experience. It dramatically reduces call waiting times by offering solutions in the moment and helps users with daily financial decisions.
Other tools include Abe AI, a virtual assistant that integrates with the likes of Google and Facebook to offer support, and Trim, a money-saving assistant that has saved many millions for its customer since its launch.
So, not only will AI you save time spent waiting for a slow human operator, it could also lead you to making life-changing financial decisions.
More sophisticated fraud prevention
One of the most fundamental concerns for customers in the financial services industry is fraud prevention. They want to be certain that their money is safe at all times, and banking institutions are continually trying to come up with ways to preserve their clients’ peace of mind.
AI is an excellent way of doing this with its ability to automatically screen financial data and ensure that it complies with the latest laws and regulations. A key example of this are Know Your Customer checks: the process you have to go through to open a bank account, for example, book flights on your credit card, or deposit funds into an online casino.
With AI, this process will become even more sophisticated, in terms of reducing ‘false positives’, often caused by human error, and saving costs in the process. This will, of course, ultimately lead to an increase in user safety.
Like with AI customer service, there are now many firms that offer state-of-the-art fraud prevention. Shape Security’s Blackfish network uses AI-enabled bots that can instantly detect fraudulent activity, and operate on a huge scale. In its first week of use, the network exposed a huge amount of ‘credential stuffing attacks’, the process of stealing account details.
With such software in action, banks can offer a much higher level of security to its customers, which means a safer world for all of us.
Instant credit decisions
Banking customers often complain about the time it takes to get the go-ahead to obtain credit from their bank, and this is normally down to a slow approval system.
With AI, a bank can analyse huge amounts of customer data instantly. As well as highlighting potential bad borrowers, it will hugely speed up the process so that customers can receive the results more or less right away.
A key example of AI software in this instance is DataRobot. Its algorithms help financial institutions make instant lending decisions through machine learning: decisions on whether to provide mortgages or car loans to customers, for instance.
The end result will be a much more efficient system, and less time spent agonising over whether the bank will accept your loan application or not.
Predicting future trends
Staying one step ahead of the game is essential in the world of finance, and businesses are continuously looking at ways to improve their forecasting.
With markets using more machine learning than ever, an accurate forecasting model is a must-have for every institution. They need to spot future risks, identify trends and provide better information, so that planning is a success.
‘But I don’t work for a bank, how can this benefit me?’ you might ask. Well, if you’re interested in investment and would like to know what’s in store down the line, then AI-based investment tools are already available for you to check out.
Of course, investors still need to do their homework when thinking of where to put their money, but AI promises to make the process a lot easier, and much more effective.