Original article can be found here (source): Artificial Intelligence on Medium
Artificial Intelligence will transform business models of the Financial Services industry in 2021
Recent years have seen great breakthroughs in artificial intelligence technologies that have changed the way industries work. Of course, this is the same for the financial industry that has gone through some dramatic alterations in the way that it’s operating. The business models of these financial companies have undergone a digital transformation, incorporating new solutions. The processes of a finance company that is the most affected by machine learning are the following:
Risk Assessment and Management
Where artificial intelligence thrives is when it needs to analyze historical data and generate predictive ones. Financial professionals use machine learning in order to identify and potentially get one step ahead of future market trends, thus creating innovative future plans. Other things that analysts in this field can learn are the potential risks and how to conserve manpower. This way, companies have the power of managing risks and sometimes even preventing these harmful situations.
Cybersecurity and Fraud Detection
Nowadays the majority of the transactions are taking place online. From the small transaction, like deposits checks, and bill payment, to bigger ones, like getting approval for a loan, and even stock exchange. For this reason, it is important for any finance company to ensure that their applications are secure and have the right tool to protect the users from frauds. Indeed, machine learning can identify any suspicious transaction and help keep the security up and running.
Personal Banking and Advisory Services
People nowadays seek personalized solutions that will save them time. This extends to their banking. Finance businesses need to explore the possibilities that personal banking is offering. Artificial intelligence assistants can be used to give smart and tailored financial advice for every customer. The clients will get instant assistance, no matter their inquiry. The system, due to the use of machine learning, will be training with every single inquiry, and thus will keep up with all of the customers’ needs.
Trading between companies has always been decided by various data-sets that predicted the future. An AI expert can set the machine learning system to observe for the specific data patterns that indicate a trade opportunity. This way, the company will make the right decision at the right moment, and with a minimized risk factor.
Credit Decision Making
Credit plays an important role in everybody’s life, as it has an impact on many aspects of one’s life. These include the renting of an apartment, obtaining a loan, or even landing a job. Finance companies use the consulting of an AI system in order to get a better understanding of the credit score of an individual. Moreover, they can use these data in order to make them according to changes to the interest rate.
It is needless to say that artificial intelligence has already brought, up to a degree, a simplification of financial management. There are tools available to everyone for scheduling payments, controlling the balance, and even making investments. The future holds many more breakthroughs that will help the financial industry take leaps forward.