How Artificial Intelligence is Promoting the Financial Services Industry
At the cusp of rapid technological innovation, we tend to see the financial services and banking industry keeping up with the latest advancements. As reported by The Next Web on May 7, 2019, artificial intelligence (AI) adoption in the financial industry has helped increase the speed and accuracy of processes by reducing the margin of error by a significant amount.
Smart Loans and Fraud Prevention
While general AI, like Skynet in Terminator, is still at least a decade away, AI for specific purposes is bootstrapping global innovation. There are several use cases for artificial intelligence systems in global finance but a few very impactful examples stand out front the rest. Smart loan issuance and fraud protection are at the top of that list considering they’ve not just reduced inefficiencies but also improved the loan underwriting and collection process.
To determine if a person is eligible for a loan or not they have to undergo a credit rating test using a government approved service provider. However, this only works for people who use banks accounts and other continuously monitored wealth storage services.
Hundreds of millions of people across the globe are unbanked or have minimal interaction with their bank account. Smart loans are underwritten by utilizing alternative data sources such as social media, technology use habits, daily routines and interactions, and a plethora of other seemingly arbitrary information. Believe it or not, these systems have helped several people determine their credit worthiness – resulting in them finally being able to leverage the full utility of the financial system. Many blockchain entrepreneurs are also launching tools to aid the unbanked in sparse regions of the world.
Cybersecurity company McAfee Antivirus, founded by eccentric crypto advocate John McAfee, conducted research that shows almost $600 billion worth of online fraud occurs every year. With the help of AI, merchants and financial institutions can deeply analyse the tons of data available about transactions and customers resulting in them being able to better tell the difference between regular and fraudulent activities.
Conversational Software with AI
Alexa has taken AI adoption to a new level with over 100 million sales since its launch in 2014. An Amazon customer can easily shop using conversational commands and an Alexa device. The ease of use has made it popular among elder generations who are generally resilient to technological innovation. Of course, there are certain limitations; you cannot browse around or compare multiple items before purchasing something, making it handy for purchases when you know exactly what you need or want.
Conversational AI has impacted the financial industry as well; phone banking using an automated AI with voice commands has improved customer service tremendously. Based on what you tell the AI over the phone, they are able to execute actions based on their command prompts. Once again, the limitation is that this AI is built with specific instructions and will not be able stray from that to offer the kind of personalization a human customer representative does.
The new age of technology is set to be a game changer for living standards and ease of living; tools such as artificial intelligence, distributed ledgers, and synthetic biology are bound to bring improvements to quality of life.