AI stands for Artificial intelligence. AI can be defined as the intelligence of a computer that enables it to copy or imitate human capabilities that involve the ability to reason, plan, solve problems, think abstractly, comprehend complex ideas, learn quickly and learn from experience. AI on fintech is the use of artificial intelligence for financial data analytics, trading advice, supply chain management, and much more.
AI has provided the financial industry with a means to meet the needs of clients who want smarter, more convenient, and safer methods to access, spend, and invest their money. Fintech apps have become the new norm in the financial industry. The role of AI in Fintech is increasing day by day. Financial institutions are rapidly investing in developing AI-based fintech products.
Benefits of AI in Financial industry
- Credit risk assessment
Credit scoring is an evaluation of how well a customer can pay and is willing to repay debts. AI-based credit scores are the most promising and relevant as it helps to make better decisions by detecting trends in past data. AI decisions on credit scores are based on a lot of data such as total income, work experience, credit history, and so on.
- Detecting banking fraud
Data is analyzed using AI-based analytics tools to identify a suspicious transactions that may indicate fraud. Through AI, clients’ ways of behaving can be checked and these cases are passed to human staff for consideration, saving them a great deal of time.
- Automated customer service
Artificial intelligence has made significant gains in customer service for fintech companies. Financial institutions must be available 24 hours a day, seven days a week, to answer queries and ease transactions. You might lose the business to a competitor if you do not respond quickly to customers. Chatbots can be used to quickly answer customer questions. These chatbots allow customer service to be tailored to people and provide expert advice at a low cost.
With AI-based technologies, communication between fintech and customers is easier and more accessible which helps to make customers happier and customer service employees who are more content lead to a more profitable firm.
- Robotic Process Automation(RPA)
With the help of smart chatbots, fintech industries may automate and streamline back-end office procedures from end to end.
RPA can be used to automate the following typical tasks:
- Onboarding of new customers
- checks for security
- operations involving trade financing and the loan application
- Processing of credit cards, account closures, and mortgages
- Financial forecasts
The use of AI in finance means that it can identify, analyze and adjust changes in data patterns on its own. AI can analyze unstructured data too. In fintech, AI can be applied in various ways, including predicting product suitability and adapting marketing strategy by analyzing customer behavior.
- Save money and resources
Using AI-powered solutions, Fintech industries can save billions of dollars in capital, labor costs, and resources. AI saves banks money at the front office through personalized insights, in the middle office through anti-laundering, and in the back office through credit underwriting. Banks can offer better deals and attract more customers because of the money saved by deploying AI technologies