Artificial Intelligence in its current form surprises, amazes, and even scares a bit. It opens wide horizons hiding some significant facts about itself. It attracts millions of enthusiasts who, however, have barely a full picture of how much AI can be useful.
Nevertheless, it is one of the greatest technologies created by mankind. It is an engineering miracle. The main point is to learn how to implement and improve it properly.
A particular role belongs to artificial intelligence in financial services. AI transforms the industry. It changes the way financial institutions have been operating for ages. And at the same time, it attracts more attention and investors to fintech. AI apps are expected to attract over $4 billion by the end of 2018! The forecast of the AI applications market tells us that it will reach more than $31 billion. The numbers are impressive.
Great banking leaders, such as Black Rock and Charles Schwab work on implementing AI in financial services. This is one more push for those who don’t believe in AI just yet. Inspired by the frontrunners’ success, more and more fintech specialists are interested in upgrading their business with AI. Some of them have a pure vision of what and how to implement to get the desired results; the others simply follow the hype and desperately look for the development partner to bring their ideas to life.
At this stage of the AI concept development, it is significant to understand what it can bring you. With a clear vision of the upcoming improvements, it is much easier to save yourself and your business from pitfalls. In this article, we will tell you how the business will benefit from the combination of artificial intelligence and finance.
6 Improvements AI brings to Financial Industry
The IT age places greater requirements on banks and financial institutions. At the same time, modern customers demand more attention, special opportunities, better conditions etc. Each fintech company strives to follow modern trends and provide the best services possible to keep head and shoulders above the water. Artificial Intelligence in banking industry can automatically solve routine tasks, provide improved solutions and bring new values to the industry. Let’s have a glance at the main types of related applications you may find fascinating:
#1. Virtual Assistants
Intense competition in the financial world takes too much time. Most of the specialists are busy with routine tasks although they may devote precious time to more serious, important things. With an AI-powered virtual assistant, it gets quite possible.
Let’s talk about a well-known example. An H&M application collects the information about previous purchases made by a particular shopper and recommends outfits based on this data. This approach helps to demonstrate professionalism, boosts trust and increases sales. Banks know far more intimate details about their customers. A thorough analysis allows finding a special approach to every single customer. Thanks to it, you may know for sure what loyalty program is interesting for a customer. You can also offer some special opportunities at the right time. In such a way, you provide great support for a customer, enhance your experience, and increase profit. All that is impossible without a high-quality AI chatbot collecting data, making predictions, providing relevant information at the best time etc.
Studies say that by 2020, more than 85% of customer interactions will be managed by bots. Implementing this type of technology, you get a one-of-a-kind opportunity to properly inform an interested customer, answer frequently asked questions, and build a basis for a successful deal. This requires no human participation: chatbot handles it all.
Besides, these technical solutions are good at forecasting. Smart algorithms help detect potential issues before they are revealed. The technologies can also react accordingly and save tons of time for customer service agents, recruitment teams etc. And in case you suffer from the constant employee turnover, AI chatbot may be the answer, too.
#2. Increased Personalization
The human-centered approach is the only chance for any business to keep in touch with former customers and find new ones. With a single mouse click, a person can easily switch to your competitors. This may be not so important when it is about one person only, but when tens or hundreds of customers leave your bank weekly, it is damaging.
The answer is improved personalization. You as a business owner should work hard on the loyalty increase. Fruitful customer relations is something more than just business; it’s about the quality of human communication as well.
A powerful AI system can recognize each particular customer during a conversation, in a matter of millisecond implement a personal approach, and highlight the fact that you care about your customers.
#3. Mobile Expansion
People love their smartphones. The mobile apps market helps us to handle everything we need without rush and panic. A powerful mobile app can be helpful with personal finance management, too.
No more excel tables you painfully try to track your costs in; no more costs you have no idea what you have spent on. Customers can gain control over their finances with a simple AI help. Thanks to improved functionality, the tool can provide analytics with the most unreasonable purchases, recommend some ways for saving money, remind of the dates of making some mandatory credit card payments etc.
AI apps is a win for financial institutions, too. A simple mobile solution powered by the AI technologies can help your customers start using your services, answer basic questions etc. What is the most important, a mobile assistant is always available in your customer’s pocket. So they don’t have to waste time trying to get to your office for a brief consultation.
#4. Reputation Management
Positive feedback is the #1 thing that brings new customers to your financial institution. A great review can attract attention. A great review is a critical thing a consumer pays attention to when deciding on a bank or lender.
An AI-powered software solution can deal with the following tasks:
- Creating quick but informative customized surveys;
- Collecting reviews;
- Providing personalized summaries;
- Fixing small issues that negatively impact user experience etc.
Here, once more, an AI solution can provide you with quite a reliable assistance.
#5. Data Security: Level-Up
Financial fraud remains one of the most difficult and problematic challenges to overcome. Starting from the ancient era, when the Roman Empire was sold and until these days, when people on Wall Street lose thousands of dollars daily, financial fraud has been a question that bothers society a lot.
Financial organizations operate with big data. Mostly, the data is unstructured, randomly added, and unsafe. Fortunately, with the rise of AI solutions, it is possible to analyze data much faster, reveal weak spots and prevent it from being hacked.
A powerful new technology in finance industry is a few steps ahead of the traditional fraud detection system. Neither human nor algorithm-based script can protect your money from being stolen better than an AI solution does.
#6. Finding New Solutions
The accelerated growth of the fintech can hardly be overestimated. A number of cutting-edge useful solutions grows daily. And business owners must do their best to follow trends and keep their positions in the market. This task may be hard and exhaustive. Daily brainstorming and important meetings may lead to nowhere. In this case, you need some breath of fresh air to enlighten the way you see your business.
A trained AI system may suggest new solutions based on the input data you provide. Besides, this is a way to find new methods of making money.
AI Applications in Finance: Alternative Point of View
Some say that AI technologies could save mankind from the 2007-2008 world financial crisis. However, the technology wasn’t mature enough at that time. Besides, AI has its own disadvantages one should be aware of:
An intelligent machine is still only a machine. So in cases that require emotional analysis of the situation, AI solutions are useless. They break down or just perform incorrectly, but cannot replace the human input.
Some solutions require creativity. An AI app cannot fully replicate the human brain. Particularly, they cannot apply design thinking or creativity to their tasks.
Hundreds of thousands of people worldwide work in the financial industry. In the case of active AI solutions implementation, it is very likely that they will lose their job (it all may lead to great socially undesirable changes).
Powerful AI applications in finance require huge investments. App development and maintenance is expensive. The price may start at several thousand dollars. So before starting a project, make sure you are able to afford it.
Lack of Experience
And even if you are OK with the above-mentioned solutions, it is necessary to find a competent development team to get your system up and running.
However, the recent statistics shows that the majority of companies are only at the start of their AI development journeys. Yes, 40% of respondents only learn about AI, and 31% build the real solutions. Only 1% answered that they have a fully functioning center for AI development. So, on the current stage, the most important thing is to find a skilled IT partner with reasonable service prices.
Artificial Intelligence opens a new chapter in global fintech chronicles. It provides great opportunities for banks, insurance companies, financial advisory agencies, and other organizations.
- AI-based tools serve well as personal assistants;
- Chatbots improve the customer experience considerably;
- AI solutions extend the functionality of a traditional mobile app;
- Technologies are able to process big volumes of data, as well as help to structure it;
- They suggest new ways of information security improvement;
- They help with routine actions, daily tasks, new solutions etc.
However, there is a different point of view. AI technologies are still rather young and really expensive. Their impact is yet unpredictable. If you still hesitate if an AI system is exactly what you need to improve your business, try to contact AI app development professionals and get an expert advice.