Advanced digital technologies are compelling businesses of all scales to transform their mode of operations. The fintech industry is no exception! Artificial intelligence and cognitive technology are empowering the industry to become digitized.
According to a joint study conducted by Narrative Science and the National Business Research Institute, three out of every ten financial service providers have already reported that they’re utilizing AI applications, such as voice recognition, predictive analytics, among others.
How AI Applications Are Transforming the FinTech Industry Worldwide
AI applications are now being increasingly used in the fintech industry. Some of its most common uses are –
Helps Detect and Prevent Financial Fraud
Robotic process automation or RPA and machine learning are becoming increasingly popular in the fintech sector for their ability to identify patterns that suggest potential fraudulent activities. Machine learning and AI applications use rule-based algorithms for predictive analysis and analyzing patterns for blocking dubious financial transactions.
AI-based algorithms review anomalies and historical data for detecting and preventing financial frauds. As per a study conducted by Capgemini in 2017, fraud detection systems that employ machine learning and artificial intelligence improve fraud detection accuracy by as much as ninety percent and reduce investigation time by a whopping seventy percent.
AI Applications Are Capable of Performing Algorithmic Trading
Algorithmic trading is one of the most frequently utilized AI applications in the fintech industry that leverages machine learning. It uses a set of pre-programmed instructions for data analysis and rapid decision-making.
These algorithms are purpose-designed for identifying patterns across exceptionally large data sets and in an impressively short span. Investment companies around the globe are increasingly relying on algorithmic trading for making customized portfolio recommendations to investors.
AI Applications Help Improve Client Risk Profiling in Loan/Insurance Underwriting
Customer profiling on the basis of their risk scores is extremely critical for financial institutions and insurance providers. The emergence of a state-of-the-art AI application in fintech, such as artificial neural network or ANN, has allowed the developers to train classification models with pre-labeled or historical data for categorizing and rating the customer profiles from high to low.
With the help of automation and cognitive learning for data collection, insurers are also improving their client profiling capabilities. Through unifying and inferring insights from external and internal customer data, businesses can derive an increasingly comprehensive perspective of their clients, such as their insurance requirements, life cycles, and interests for more effective segmentation and targeting.
AI Applications Are Used in Investment and Asset Management
When it comes to discussing the role of AI applications in the fintech sector, the significance of artificial intelligence in investment and asset management cannot be stressed enough. AI technologies are increasingly used to include varied sources into investment models; obtain press releases, financial records, filings, and information from social networks and news.
AI algorithms analyze massive heaps of raw data, such as alternative data from satellite imagery, store circulation, credit cards, and many more for hedging. AI application in fintech is even capable of providing tier-one support in investment and asset management.
At Visvero, we’re committed to empowering businesses with state-of-the-art AI applications for improving their overall efficiency. Call us today to schedule a consultation and discuss your requirements with our experts.