Just visualize the situation, technology has improved right from inventing the wheel to the artificial intelligence of today. But yes, there has been a big gap in the adaptation of technology. Even in India and other developed countries, you can find a sizable chunk of the population not knowing the method to do digital transactions. As of now, artificial intelligence, cloud computing, and cryptocurrency have become the recent buzzwords in the finance industry. The scope of AI is very vast, ranging from automating machines to the very process of preparation of humanoid robots and their management. And AI has made a beneficial impact in many industries right from healthcare to finance to the manufacturing of bikes. In this article, however, let us focus on the impact of artificial intelligence in finance.
Why Finance Companies Use Artificial Intelligence.
It is true. To the very word. The application of Artificial Intelligence in Finance. The reason, if you say finance, then the next step is the analysis of numbers and data. And when it is a special design program such as AI, then these applications can identify patterns of data better than humans. There is no doubt of error. In fact, thousands of companies in every developed and developing country look at artificial intelligence as a very big thing when it comes to the finance industry.
Some Examples of Applications of Artificial Intelligence in Finance
Finance experts say that the industry has benefited immensely from AI. Just look at the example, Machine learning, virtual personal assistant, chatbot and cognitive computing are some best examples of artificial intelligence in finance.
Yet, there is also a disadvantage. Getting the trust of customers. A customer will always trust a fellow human more than a robot or software applications. In the future, however, though this new technology can make a sizable impact on finance, disadvantages also remain. Will all AI applications be regulated? What if the machine makes a decision on its own and changes the result? Well, these are questions that still remain in the minds of the common public. So, the applications have to be developed in a way, that the right balance always remains between machines and humans.
Artificial Intelligence in Finance – Benefit 1
When it comes to auditing of company transactions, then AI takes the prime seat. The other benefit, an AI application can give is on analysis of hundreds of pages involved in transactions and tax changes.
Artificial Intelligence in Finance – Benefit 2 – Assessment of Risk
When it comes to the finance industry, the major jobs of a financial firm are bookkeeping and records. Right? Now consider the same for a credit card giving bank or company. Yes, a decade ago, based on your old credit score and transactions, you were awarded the credit card. But the banks and financial institutions found that grouping people into the main two branches of “can give” and “cannot give” is problematic for the business. The bank may get to lose more customers.
Instead, they fed details regarding repayment habits and the number of loans a person has to the Artificial Intelligence mechanism. After looking through all the details, the bank or institution can decide to offer the credit card or not. Just imagine the work done. Do you think that a human can sit through an individual’s bank statement, transactions, number of loans and then give the result? He can, but it will take time. Instead, an AI can browse through hundreds of transactions, records and give the perfect opinion devoid of human error.
Now you can also consider another factor of artificial intelligence in the finance sector. Have you heard about chatbots? Now, let us imagine a case study. You work in a company specializing in TV repair in Mumbai. Your company has tied up with one of the best home maintenance companies which provide doorstep repair services for customers. Now, you file the taxes via a financial institution.
Now, you get some doubts regarding the filing of taxes. What do you do? You call the financial institution’s number. You get the apt response to your questions. But the surprise of all surprises, the calls are answered by a chatbot and not a human. You can consider this aspect as one more benefit of Artificial intelligence in Finance.
Artificial Intelligence in Finance – Benefit 3 – Fraud Detection And Management
Banks and lending institutions are definitely very cautious when giving money as loans. It is mandatory, that they look at the spending habits of a customer, his/her salary, his/her assets and then led money. In recent times, Artificial intelligence in finance has even stepped into fraud detection. AI application can definitely look into the spending patterns, his/her purchases via the debit/credit card and send the right message to the bank. Please note, that AI application can never do an error.
There is also one more advantage. If the AI has done a mistake, and the admin corrects it, the application automatically learns about it. It never does the same mistake again. So the AI can take the best decisions when it comes to considering an individual as a fraudster. If every detail of an individual is positive, then the AI will give the green signal to grant the loan.
Artificial Intelligence in Finance – Benefit 4 – Advice
Imagine you are a middle-class person. You want to invest in mutual funds and step into a financial institution. Now, a human executive will take more time to analyze your salary reports and spending patterns. Then he/she will take time to decide as to which mutual fund will suit your lifestyle. But consider the same situation if a humanoid robot with AI attends to your question. It will take less time to scan your reports and then give the perfect mutual fund to suit the requirement.
Artificial Intelligence in Finance – Benefit 5 – Trading
Have you ever indulged in stock trading? Then you must be continuously looking at the computer where the prices go up and down on shares. Now, do you think that an AI with special applications can judge the patterns more clearly and give the perfect report? Yes? Now you guessed the answer. AI can not only suggest the best buying shares but also give alerts when a share goes down. This is another beneficial aspect of artificial intelligence in finance.
There is another benefit of AI in the finance sector. Management of finances of an individual. And the AI application does the job with elan. In fact, AI in the future will become the best watchdog for handling the financial portfolios of many financial institutions.
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