Wednesday day, March 12, 2020 / 03:30PM / Content by Molly
Crockett / Header Image Credit: InfoWorld
AI has changed
many aspects of the way people interact and interface with technology. Tasks
that were once performed manually, often at considerable time and cost, are now
performed in a fraction of a second due to the advancements in AI technology.
AI is being
applied in nearly every field imaginable to improve process, increase
productivity, improve customer experience, and lower costs. One of the areas in
which AI has been utilized in the Financial Technology (FinTech) sector.
Artificial Intelligence will continue to improve FinTech over the coming
decade. This article will be an overview of just how this will happen.
ChatBots
Banks and Financial
institutions used to be a major source of inconvenience for most people.
Whether it meant waiting in line for a bank teller or waiting on hold for a
customer service representative, even the most basic inquiries meant devoting a
large portion of time to the endeavor. Chatbots have changed this. AI
technology is at a point where many basic or common issues can now be solved
with ChatBots. This will continue to evolve and improve as the technology
becomes more advanced.
Credit Score Calculation
For decades
one's FICO score was the end-all for their credit score. Banks and lending
institutions would determine an individual's eligibility based almost solely on
this score. This is because lenders simply did not have the time to dig deep
into a person's credit history and financial situation to make the decision;
relying on the credit score was much simpler. Some people are better for
certain types of loans than others and this is not always reflected in their
credit score. AI technology has changed this. Individuals can now be assessed
in much more depth than before in a fraction of the time.
First Time Home Buyers
Many mortgage
lenders have adopted AI technologies to search for qualified first time home
buyers with a level of success traditional methods did not achieve. The driving
force behind this is the fact that Gen Zers, people between 23 and 36 years of
age are currently the most motivated to buy a home.
Trading
Algorithm
trading is not new, but AI-based trading is. For years trading bots would
operate on set in stone rules that dictated what the program was to do given a
specific situation. The current trend is taking these algorithm-based programs
and incorporating them with AI technology so that they can operate less
statically and more dynamically.
These programs
are also made in a way that allows the software to learn from past events. If
certain trades or setups didn't work what were the conditions they were
performed in? The program can use this experience, much the same way a human
would, to make more profitable trades.
Accounting Technology
We have
already seen the rise of fully automated accounting programs like TurboTax and
QuickTax but the future will hold even more advanced and responsive accounting
technologies. AI integration will allow programs to perform larger, more
complex, accounting procedures they currently are not able to carry out.
Fraud Prevention
Most people
have had their card declined or canceled because the issuer felt there was some
sort of suspicious activity on the card. These errors are performed by software
and not humans and are caused because of the static nature of these fraud
prevention programs. FinTech develops more and more fraud detection and
prevention systems are being created which use AI technology to better identify
fraud.
Risk Assessment
Perhaps one of
the largest uses of AI in FinTech can be seen in risk management software. The
traditional method of evaluating an investment had bankers or investment
specialists looking over data and analyzing fundamental indicators in hopes of
determining if the investment was worth the risk or not. With the advancements
in AI, software is now being employed to do just that but much faster than
humans ever can. It also allows lenders to draw on, and process, a much larger
data set than they ever could otherwise.
The future of
AI in FinTech is very bright. The world is connected like never before and
nowhere is this more evident than in the connectivity of the financial
industries around the world. The world runs on finance, it is a central part of
our lives. Because of this, we can expect FinTech to be at the forefront of AI
research and implementation.
Molly Crockett is an expert marketing and business writer
at Academized and Essayroo, where she writes content offering advice to managers
looking to optimise their business practices. Molly also tutors at Boomessays,
where she regularly seeks to find new ways to help young people to develop
their writing and research skills.
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