Did you know the Artificial Intelligence market is valued at 327.5 billion US dollars in 2021, and its software segment alone is expected to reach 126 billion US dollars by 2025?
As far as AI in finance is concerned, around 70% of all financial companies and firms use Artificial Intelligence for various purposes. In fact, the global AI Fintech market was valued at USD 7.91 billion in 2020 and is expected to reach USD 26.67 billion by 2026.
AI software solutions have potentially revolutionized the finance sector by disrupting the traditional way of doing business and enabling businesses and individuals to manage their finance effectively.
So, suppose you are running a financial service firm and exploring the potential of Artificial Intelligence in your business. In that case, you must have plenty of questions that you’d be looking for answers to. And, this article solves all the major questions you have related to AI in Fintech or finance. So, let’s explore;
Significance of AI in Finance
What are the benefits of AI in finance? That’s most probably the first question you look for to answer while considering Artificial Intelligence in your business.
Artificial Intelligence is a boon for the finance sector, enabling the industry to manage their business efficiently by enabling task automation, detecting & stopping fraud, providing customized/personalized recommendations, and many others. Let’s explore the benefits of AI in finance in detail.
1. Superior Customers Experience
Today’s customers look for speed, comfort, and convenience. At the same time, traditional banking or finance is an antonym to all of these. Banking sector has been struggling to provide satisfactory services to customers. However, those were the past matters. Things have changed significantly —thanks to the advent of technology, especially AI solutions. It has changed the way banks and others finance offices work.
They are now efficient in delivering all banking needs to their tech-savvy customers and provide satisfactory services that Millennials want. With AI-powered solutions, you can open doors for many opportunities;
- Provide fast and convenient services
- No long, long waiting queues
- Personalized banking for users
- Data-driven smart insights
2. Personalized Finance
Artificial Intelligence is helping banks create customized financial plans and offers. For example, AI-based solutions or smart solutions powered by Machine Learning can help banks to offer loans to each customer based on their;
- Credit Score
- Credit History
- Past Behavior
- Interest
It will save banks their time and resources while supporting more customers with satisfied banking services.
3. 24/7 Customer Interactions
Banking or finance needs are not bound with any time. It can arise anytime at any moment. So, your presence matters. No doubt, many banks have deployed customer service executives 24/7 for quick assistance. But, that consumes a lot of time, and banks have to spend a lot of money and resources behind. We are not going deep into it as we have already written how AI-driven chatbot bring revolutionary impact and serve round-the-clock without asking for any additional payment. You can explore the article for a better understanding.
4. Make Informed and Data-Driven Decision
Artificial Intelligence, along with Machine Learning, can help you collect and analyze data through AI analytics. Decision matters as it decides the future function and growth of your finance business. A minor mistake or wrong decision can put your term at risk. AI can solve this hassle not just by collecting and analyzing the data but by translating it into a readable and understandable format.
When you have completely analyzed data and prepared a report, taking stock of loopholes and repurposing the process becomes easier. With AI-driven data analytics, you can;
- Create precise marketing strategies
- Enhance business operations
5. Mitigate Potential Risks
Did you know a study finds that AI has the potential to save $70 billion of North American banks by 2025 while aggregate potential cost saving can climb up to $447 billion by 2023?
The cost-saving factors include the cost that banks have to bear due to risks, fraud and other reasons. AI software solutions eliminate all risks. For example, an AI solution helps you;
- With the predictive forecast to make informed decisions
- Check clients’ record and credit history
6: Prevent Fraud
According to a report published on McAfee, financial fraud and cybercrime cost an average of $600 annually to the banking and finance sector.
Application of AI in Finance
Banks use AI for different purposes. Fraud detection is the top one. 58% of the banking and finance sector choose AI software solutions for fraud detection, a study by Statista. But, that’s not the only reason; there are plenty of other reasons why banks choose AI solutions.
We have attached a graph explaining why the banks and finance sectors implement AI solutions into their business process. They include;
- 58% for fraud detection
- 41% for finance process and analysis
- 33% for cybersecurity
- 33% for personalization of products, services
- 31% for customer care
- 25% for asset maintenance
Let’s take a look at the graph given below.
So, the graph given above must have given you a strong reason why you should consider deploying these smart-driven solutions into your Fintech sector. Now, let us give you another answer to your question: what are the possible applications of AI in finance.
Let’s explore;
1. AI in Personal Finance
Consumers, Millennials are after financial independence, and banks successfully satisfying their desires are ruling the roost. The growing consumer demand for managing one’s financial stuff is the driving force behind the adoption of AI in finance. Whether offering comprehensive mobile banking, 24/7 customer support via chatbots or others, Artificial Intelligence has a big role in making things possible.
Yes, the implementation of AI software solutions in finance depends on the quality of products and implementation. Choose the AI Solution Provider carefully, as the outcome depends on the reliability of the solution. You might have plenty of questions about how AI in banking works and what challenges the technology helps to eliminate. Explore online, find out some good case studies regarding AI in banking and know how things work.
2. AI Software Solution in Consumer Finance
Did you know fraud, especially online payment fraud, will rise to $48 billion yearly by 2023?
That data is shocking and can cause serious loss to the finance sector. But, it can be prevented —with the help of AI solutions. No doubt, today’s tech-savvy generation demands speed, comfort and convenience, but the one thing they don’t tell you is they look for secure accounts.
And, AI has the ability to provide a secure, safe and trusted banking system to your consumers. Again, connecting with the best technology partner will play a significant role. Explore the top AI consulting firms to get a reliable and guaranteed solution for operation.
3. AI App in Corporate Finance
AI empowers you to predict and assess the risks and in corporate finance. AI will help you increase value by helping you improve loan underwriting and mitigating various other financial risks. Machine learning, the subset of AI, can help you create a robust system that helps not loan underwriting but can help you lessen fraud. If you are successful in stopping fraud, it will add growth and win investors’ faith.
Many banks in the USA, including US Bank, use AI applications seamlessly, save, and convenient banking to its users and consumers. The best result of solutions comes after the quality AI development services -means the technology partner you choose.
4. AI and Fraud Prevention
We have talked about banking fraud, and you have seen the data as well. Let us add just one thing here: all the fraud, cybercrime, cheating, etc., can be stopped, at least reduced to zero. The only thing it requires is a proper system in place and attentiveness.
AI Solution in fraud detection helps analyze and find irregularities in patterns (mostly go unnoticed by humans). You can take the example of JPMorgan as the company adopted an AI-driven fraud detection application called Chase for its customers. Each transaction made by customers is properly analyzed and monitored. You may also choose to build such an application for your customers and gain faith and trust. Being a top AI app development company, we have built plenty of such applications for our clients worldwide. You may like to go through our white paper, detailing AI-Integration for Insurance Companies. We can help you build an AI app for your finance business.
Final Thoughts
Artificial Intelligence is described as material omnipotent by thought leaders due to its immense power and support to businesses and individuals. It comes with unlimited power, just like a human possesses. More than that, the full potential of AI is still being discovered, and it is believed that it continues to evolve over time.
We are an AI development company offering a wide range of AI software solutions for the banking and Fintech sectors. With more than 70 developers in our Dublin, Ohio headquarters and another 200+ overseas, we build custom AI software, irrespective of needs. In short, we have a solution for all your business problems and needs. Let’s connect.
We’re technology experts with a passion for bringing concepts to life. By leveraging a unique, consultative process and an agile development approach, we translate business challenges into technology solutions.
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