The recent pandemic has ushered in deep, lingering changes in the way we work, shop and interact with the world. Needless to say this has had a profound impact on customer behavior as well. It has now become routine for account holders to rarely visit their banks. People have become so accustomed to digital transactions that many millennials are unlikely to even know where their physical banks are located. The pandemic has pushed this trend even further by forcing a large chunk of the populace to commit exclusively to Digital financial transactions.

Introduction

Although the surge in demand for the fintech industry has been great news, banks and financial institutions have scrambled to meet the demand with intense restructuring efforts of their operations and services and modernize their offerings. In order to drive the necessary overhaul in their operations as well as enhance and tighten their security infrastructure, banks are now looking towards artificial intelligence as one of the corner stone technologies to enable everything from seamless customer interactions to enhanced security. Artificial intelligence is the driving force behind a number of core banking tools and processes such as Chatbots, Robotic Process Automation, blockchain and more. Recent estimates suggest that AI is likely to drive an aggregate potential savings of $447 Billion by 2023 for the banking industry. IT Support New Jersey can help companies implement AI in their financial service offerings.

Related: Ways To Save Your Business Money

How AI Is Transforming Financial Industry

Increased automation in routine tasks

One of the biggest benefits of AI in any business is that it can take care of repetitive or routine tasks that normally require a lot of manual labor and normally tends to increase the scope of error due to fatigue. These can include tasks such as regular review of loan applications and checking for errors and fraud. Managed IT Services New Jersey has an extensive database of resources on how to strategically implement automation in financial service processes.

More informed decision-making

AI is simply capable of much faster decision-making while parsing through an unimaginable amount of data. This can enable companies to make much more informed, data-driven decisions in real time. AI can also help you to better analyze the data through in-depth analysis and insights as well as discovering patterns and trends in your data that may well enable you to predict results in the short term.

Identifying opportunities for increase in revenue

Since AI helps you better understand and visualize your operations and data, Artificial Intelligence Benefits also include the ability to help companies better identify opportunities for revenue expansion or enhancement. It could help you determine ways to sell more products or offer better services or even expand on your existing customer base.

Ways AI is Transforming the Finance Industry

Here are the major ways in which AI is transforming financial services:

Fraud Detection

Fraud is an ever present and increasing threat to the financial industry as well as consumers. This is especially true when it comes to digital transactions as digital tools also make it possible for scammers to leverage the power of sophisticated tools for criminal enterprise. Fraud in the financial industry can include credit card fraud, false insurance claims, loan application fraud, organized crime, and more. Recent FICO estimates suggest that nearly 4 out of 5 banks have witnessed an upsurge in fraud activities with the annual toll rising to US$1 trillion. Clearly, fraud is a threat that banks are especially keen to combat with enhanced security tools enabled by AI. Some of these are already in existence with banks employing specially-designed AI algorithms to detect anomalies or unusual patterns in their data. The most promising part of deploying AI in fraud detection is that AI is able to detect subtle variations in data that may not always be discernible to human eyes and pay equally close attention to impossibly large datasets.

Credit Decisions

Credit applications are witnessing a surge and banks need to process approvals quickly in order to stay effective. The scoring method employed by human decision-makers in credit decisions has often resulted in bias and can be highly time-consuming. Banks are now looking to automate the approval process to enable more accurate and faster decisions. Artificial Intelligence Machine Learning can also help lenders accurately assess the often fine line between high-risk and creditworthy individuals and help spot potential borrowers at lower costs – all with zero bias.

Risk Management

As the name implies, risk management involves ensuring a company’s security, and strategic decisions. This helps keep financial companies safe from an ever-evolving list of potential threats that can endanger its functioning or profit. These include credit risk, political risk, market risk, inflation risk, legal risk, ethical and PR risks and more. Artificial Intelligence Technology can help companies navigate these treacherous waters by developing models that analyze reams of data to correctly assess trends, prioritize, monitor and manage risks. Cloud Services New Jersey can help your company better manage financial risks.

Hyper-personalization

Exceptional customer service is quickly becoming the norm expected by customers. A report conducted by HSBC shows as much by confirming that hyper-personalization is likely to be the defining trend for the next decade. As customers grow more demanding, banks must increasingly personalize their offerings to meet the demands of specific customers. Hyper-personalization makes use of AI to deeply analyze and acquire relevant and applicable data to enable a deeper degree of customization in their products, services, and approach depending on specific customers. AI-based algorithms are highly capable of achieving this degree of hyper-personalization as they can deeply analyze customer data and behavior in seconds and glean insights from a diverse array of customer data points including past transactions, social media interactions, customer behavior, feedbacks and opinions.

About Chris:

Chris Forte is the President and CEO of Olmec Systems, which provides specialized services of IT Support Atlanta, New Jersey & New York area. Chris has been in the MSP work-space for the past 25 years. He earned his Master’s Degree from West Virginia University, graduating Magna Cum Laude. In his spare time, Chris enjoys traveling with his family.