Three ways AI is transforming the finance industry
Despite digital finance being well-established way before the onset of the coronavirus pandemic, like many industries, COVID-19 has accelerated the pace of change within FinTech as the demand for online banking continues to rise.
With this change comes the introduction of artificial intelligence (AI) and machine learning (ML) which have been among the key drivers of growth and sustainability for financial companies.
Here, AI Magazine looks at three different ways AI can be applied within finance to harness growth and boost productivity.
Utilising AI for fraud detection
Fraudulent transactions cost economies a significant amount of money every single year and are a significant problem for many financial institutions globally. Not only does fraud financially impact companies but can also be damaging to a FinTech companies’ reputation.
AI can be used to analyse a large number of transactions in order to uncover fraud trends, which can subsequently be used to detect fraud in real-time.
When fraud is suspected by an AI model it can reject transactions altogether or flag them to a member of the team for further investigation. In doing so, this allows investigators to focus their efforts on high-risk fraud attempts.
Customer support powered by AI
There are a number of ways AI can improve customer support in financial companies, one key way being the introduction of chatbots. AI-powered chatbots can not only minimise the workload placed on call centres, but they can also make the customer experience for those with simple questions easier. This technology makes communication between a customer and a bank easier and more accessible by using automated scripts to resolve simple complaints.
By deflecting simple tickets from customer service teams, chatbots free up workers' time to focus on more urgent and complicated matters, leading to a better banking experience.
Chatbots have also been proven to help grow financial institutions' customer networks.
AI loan approvals
In the wake of coronavirus, many are struggling to recover from the financial challenges brought about by lockdown - this means that the demand for financial assistance is at an all-time high.
One large issue for lenders in the financial sector is the amount of work and time it takes to evaluate and approve loan applications. Manual underwriting can be a laborious process, but one that can be automated with specialist AI applications.
As it performs real-time analysis, AI has the ability to automate approvals for low-value loans and assist in the evaluation of larger transactions, such as mortgage applications.