Impact of Artificial Intelligence on Financial Technology

Artificial Intelligence, or also commonly called AI, is the answer to how Siri on your iPhone is able to respond to your voice, how Google Maps knows where to take you, and how Captain Price knows when to use melee attack in Call of Duty. In a more literal sense, AI is the intelligence displayed by machines or ‘machine learning’. AI has been described as the science and engineering of making intelligent machines, especially intelligent computer programs. In this article, we are going to discuss how AI plays an important role in financial technology.

Artificial Technology has always lent its hand towards new and innovative developments. Research into its intersections with several domains such as healthcare, agriculture, textiles, as well as public policy, have already advanced significantly and intersections with many other disciplines have already begun to surface.

AI-powered chat assistants are a common feature across major brands like Apple, Google and Yahoo! (Yahoo! In fact, uses AI to auto-type articles just like this one.) But that’s not where it stops. Its growing application in the domain of financial technology has also brought forward many spectacular developments. Below are some of the major ways in which AI has already become a major contribution to Financial Technology.

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Security and Safety

Various major firms and companies are incorporating AI into their policy making and management is to enhance security. This move has almost completely replaced now seemingly primitive anti-virus softwares. AI is now seen as the smarter way ahead. It uses machine learning which helps the companies in restructuring their systems for a better security foundation.

Since AI is technology based, its malleability in terms of how adept it is with large volumes of security data is a given attribute. Furthermore, there are a number of things that AI as a tool for security management does that aid especially in a growing company:

• Prohibited behavior 
• Potential attacks
• Fraudulent transactions

AI helps keep the sensitive information in a firm safe.

Time Management

When we talk about technology, one of its most obvious advantages features the saving of time and resources. In a financial industry set-up, time management is of the absolute priority and AI helps in precisely targeting the given goals of an industry in a limited time space. It prevents time lost in communication, transactions, operations and delivery.

A big impact is seen on the time AI saves during the processing activities. Processing receipts and other financial documents is bound to take a lot of time and in addition, is susceptible to human error. AI learns to smartly recognize patterns and to process huge amounts of data efficiently, using the principle of Machine Learning.

Efficient Automation

One of the biggest ways in which AI can benefit any industry is by increasing its levels of automation. Especially in Financial Technology, AI can help reduce the issue of manual management and decrease costs at the same time. AI can quickly and accurately generate expenditure reports and can also manage them using pre-loaded information. In fact, this article even claims that Automating repetitive tasks, i.e. using AI to support employees in their daily duties such as verifying compliance, underwriting or responding to clients and deep learning, can, at least in theory, replace workers altogether.

What seems to work the most for this collaboration is that AI comprehends approval work flows and can aid a company that wants to restructure their expense tracking system or even automate it. It helps prevent any scope for reimbursement frauds, budget mismanagement, operations failure, all thanks to its ability to generate automated reports. 

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Data Processing

AI also helps financial institutions is processing their data across various functions they use the data to perform. Its speed and accuracy, of course, is a given. But what adds significantly to its efficiency is its capability to adapt to given commands and recognize specific patterns. AI is truly a ‘smart’ technology in that sense.

Why that feature of AI is remarkable in the financial technology industry is because it is an industry that is heavily reliant on gathering data and efficiently managing it in order to stay ahead of the competition. AI helps collect these large amounts of data and process it efficiently to gain insights and create reports. These reports not only improve productivity and revenue, it also helps in complex decision making processes. An example can be found in RBS, which has developed Luvo, a technology which assists it service agents in finding answers to customer queries.

Chat Bots

AI has gradually emerged from being only a behind-the-scenes helper to being on the forefront. Many platforms, especially online, now use chat (ro)bots in various capacities. They may operate as a customer support assistant, an analyst, or as an operations staff. Many banking institutions have already developed their own chat bots and are constantly engaging their business with AI.

Generally, financial institutions operate Chat Bots as a self-service customer-facing tool. However, Chat Bots have varied implementations, like-

• Reminding customers about upcoming payments
• Supervising customer’s creditability 
• Taking commands from social media platforms
• Checking and managing bank and other financial accounts
• Mapping employee performance or consumer investment trends

Remarkably, Maruti TechLabs regards Chat Bots as a technology that can substitute a financial advisor, broker, or an investment manager. And these are only some of the many ways in which AI has started to make a huge impact on the Financial Technology industry.

Conclusion

In conclusion, Artificial Intelligence (or AI) has started to make its impact on the financial technology sector in astonishing ways. There is a clear advancement towards using more technology in the financial sector not only to increase productivity but to create a more personal relationship with the customer, more lucrative portfolios, and even a decentralized money system. After undeniably having made significant impacts in the fields of retail, healthcare, and trading, its contributions to the domain of financial technology makes for something exciting to watch out for.

What do you think about AI’s impact on financial technology industry? Let us know in the comments below whether you think its application is going to benefit the industry or bring upon more harm than required.

By Rishabh Bhatnagar:
Rishabh is a law student with a passion for Blockchain / Cryptocurrency, Internet of Things (IoT), Cloud Computing, Artificial Intelligence, and Startups. He is an avid reader with a taste for writing. He likes learning about new things and is a writer at TechSutram. You can contact him at our contributors' section.Opinions expressed by techsutram contributors and partners are their own.