The year of 2020 did bring many challenges in countries around the globe, and in various sectors. There was a major upheaval in the methods of spending money, and decline of human activity. For example, going to banks ATM for cash. But, when looking at the entire landscape in businesses, you can see little traces of positivity in the finance sector. This article will focus on the points of “How Artificial Intelligence can impact Fintech Sector?”
The individuals who shrugged the use of digital technology had no option but to switch to online banking to complete their daily tasks during the lockdown period. This was the period when technologies such as Artificial Intelligence and Machine Learning redefined the ways of working in Finance Industry.
Introduction
Technology and tools have always been a part of human life. Right from the day, our human ancestors invented fire & the wheel to the sophisticated gadgets of today, technology has influenced our daily lives to the fullest. And yes, now, programs and applications have become a part of our daily lives, which think and act better than humans. Hope you have got the clue? We are talking about Artificial Intelligence and Machine Learning.
There was a time when machines with human intelligence were the objects of fantasy movies such as Terminator in the 1980s. But after four decades, the fantasy has become a reality. When it comes to making use of AI by Fin tech companies, it is heartening to see finance industry moguls working with coders & software developers to develop applications.
Is AI reshaping the Finance Sector?
Yes, the year 2021 will see more of AI applications in various ways as never before. For example, it will be chatbots answering more of customer queries in banks and wealth institutions; AI will get used in fraud detection tools and verification of KYC documents. For wealth investment companies, the technology can help evaluate an individual’s investment opportunities, produce investment portfolios and reduce the risks involved in adapting new technologies. Let us look in detail at how Artificial Intelligence is assisting the Finance Sector in the following paragraphs:
A. Decision Making
Insurance companies and investment advisors, before introducing a new product or service into the market, can ask questions to AI platforms rather than customers. The platforms, laded with customer data and having the ability to analyse as well answer questions can give recommendations on filling the loopholes and doubts.
This will help the insurance agents/advisors get a clear view of customer expectations and decisions. They can then reframe the product or service to suit the customer’s needs.
B. AI Can Detect Online Frauds and Provide New Insights to Claims Management
The analytical tools used by banks to detect frauds have AI applications to monitor a costumer’s spending patterns and inform attempts of malpractices. It is impossible for a human to analyse a large quantity of data within the deadline and submit a report. But, AI because of its automation process can not only detect the errors but give the result within the specified time. There are some AI processes, which can modify themselves to detect new patterns in fraud detection cases. For Claims, insurance companies use a combination of AI and ML technologies. A classic example of Artificial Intelligence impacting the Finance Sector.
C. Automated Virtual Financial Assistants
Investment organizations have always modified their technologies to suit the recent trends. They are using automated virtual assistants to call new customers, have a pleasant conversation, inform them about the new products, the pros & cons, and finally entice them to do an investment. However, these machines also need information about an individual’s personal financial portfolio, so that they can sell the perfect bonds and stocks. Have you heard the new name given to these Virtual Financial Assistants? It is “ROBO ADVISORS”. These new applications are redefining the way AI will redefine the Fin Tech sector.
D. Security
Had anybody even imagined the success of E-Commerce Artificial intelligence in marketing industry before two decades? Maybe, only a few. Now, it is a billion dollar industry. With many E-commerce websites making use of Augmented Reality and Virtual Reality to garner more customers, industry experts are focusing more on online security. Yes, AI applications have definitely helped mankind. But it is also true hackers are using the same technology to break into e-commerce websites by making use of chatbots.
Phishing has attained international recognition within the last few years. You receive a call from a con man, and then get swindled of your hard-earned money. While this is a growing menace, banks have pulled up their socks to give the solution also with the same technology. They have installed AI applications on their servers to detect unfair spending activity, and if found, they can stop payments and send warning signals/messages to you as well the banks. By this method, banks all over the globe have saved hard-earned money of customers.
E. Chatbots for CRM
The month is June 2021, and time has flown fast, but still many companies have asked their employees to work from home. Now, the customer care industry has faced many challenges such as internet issues and less manpower. So, businesses saw a more prospective way of including AI chat bots in the CRM process. The recent CRM chat bots are highly developed and can adapt themselves to give answers of even complicated queries. Also, unlike the traditional methods, where IVR was the main option, now chat bots can answer customer calls directly, thereby ensuring brand loyalty and fast solutions.
F. Meets Compliance Guidelines
The world of cybercrime has made banks and financial institutions focus on factors such as KYC (Know Your Customer) documents. A simple change of mobile number or stalling of mobile connection can result in a phishing attempt. To quell this challenge, Governments in all countries have floated stringent procedures in investigation of KYC documents. But, it becomes difficult for an international bank or institution to verify millions of offline KYC documents. However, an AI application can scan many documents, detect errors and submit an accurate report within the deadline. This helps banks identify errors in a customer’s profile and take necessary action.
G. AI Can Interact With Customers on Another Platform
In 2020, Yes bank introduced the AI robot, LUIS (Language Understanding Intelligent Service) to answer nearly 10,000 queries on Whatsapp. You can use this service to check account balance, apply for products, and submit requests for cheque books.