Blog: How Artificial Intelligence Can Upgrade Finance Industry?
Artificial intelligence has been utilized in various fields, and almost every industry is taking advantage from the implementation of this technology.
Basically, AI is a branch of computer science that integrates the human-like intelligence into machines. It provides machine the ability to make decisions like a human. The main aim to achieve with AI, is to create machines that can act like a human. The traits it needs to be handled are knowledge, problem solving, reasoning, learning, planning, perception and the ability of momentum.
Actually, the utilization of this technology is increasing and redefining various industries. However, the challenges it is addressing in the finance industry are massive. Previously, Financial services industry realized the need of advancement, because the traditional approaches were very time consuming,and inefficient.
This industry has to deal with large data sets, with a variety of financial services and a complex global market. In such aspects, only Artificial intelligence can provide high-grade solutions and instill the efficiency in workflow. This technology can impact various sectors in finance industry, take a look how it can work.
For many financial service providers and experts, it is hard to create a fine portfolio in accordance with the objective. The AI algorithms regarded as ‘robo-advisors’ can create fine and relative portfolio that tunes with the end goal of users. This can also underline relative risk tolerance. These facilities are beneficial and can be helpful in attracting millennial consumers, who always look for investing advisor. This digital assistance can provide them right aid, and they don’t need to hire a human advisor.
Frauds are very common in finance industry. Earlier a variety of fraud detection systems were introduced. But, they are heavily relying on a complex set of rules and ain’t a feasible solution. In comparison, artificial and machine learning based systems are very advanced. They just cannot identify the mistakes but also can flag them for security teams, so that team can take required actions and can find solutions. Besides, these systems can also figure out the location, anomalies, transactions and can verify the place of customers. During this identification, if it finds any error it marks the data and flag the sensitive cross border movements.
For each company regulation compliance is a very crucial aspect, because it not just helps in understanding the end objective. But also allows to understand that everything is complying with the associated laws and policies. In this task, the chances of errors are great. Though, this can be avoided with AI. AI can remember and comply with all relevant policies and laws. With such a system, the problem of human error can be removed. Besides, documents can also be analyzed through natural language processing. Altogether, these systems can be able to provide a comprehensive overview about associated parties, regulation, and processes.
Create Competitive Products
With AI system, it is easy to compare the products and services, then there is no need to offer credits on products. For banks, it is hard to figure out which service can lure more customers, and draw them to the banks. With AI system, they can analyze the credibility of all available services, and can find out which service performed well over the time. By analyzing users’ response, banks can create competitive products.
AI-powered tools can be useful in managing a larger quantity of data and can allow work efficiently & effectively. Today, there are some hedge funds that utilize AI partially for risk control and risk management. In such establishments, managers play a small role. However, the algorithmic systems can make million of trade in a day thus the term ‘high-frequency trading comes in between’.
Intelligent systems can analyze public remarks and can compare historical data. Thus the stock forecasting is simple with such technology.
Other than these, AI can also be useful in stress testing, providing better customer services and more. This technology has great potential. Through the bleeding edge, it can offer various stringent solution to the industry. This technology is not only for creating intelligent machines but also for reducing human labour in various tasks.