Companies in the financial sector can leverage artificial intelligence to analyze and manage data from multiple sources to provide valuable insights. These innovative results help banks overcome the challenges they face on a daily basis while providing day-to-day services such as loan management or payment processing. Let’s now look at some AI-driven FinTech innovation use cases and the key benefits FinTech companies can derive from this technology.
AI in finance is providing many solutions to enhance security precautions. For example, banks offer apps that are only accessible by facial recognition or fingerprints. This is made possible largely by artificial intelligence.
Some experts think that passwords and usernames will be replaced by AI-based security solutions in the near future. Voice recognition, facial recognition, and other biometrics can add an extra layer of security and are harder to bypass than a traditional password.
Artificial Intelligence in FinTech includes behavioral solutions and could lead to a revolution in the financial sector. AI can track how customers interact with their transactions and identify their typical behavior. Let’s say a customer tries to withdraw $7,000 from his account at a location outside of his usual location several times in a row. AI-powered machine learning will detect this activity if it could be fraudulent and block it.
Improve customer service
There are many use cases where AI can improve customer experience and customer service. Here are some examples:
Chatbots in FinTech
AI-powered chatbots can reduce the workload for call centers when it comes to resolving the most common and frequently encountered user issues.
Seemingly simple, each chatbot uses complex sentiment analysis, which is made possible thanks to artificial intelligence. This sentiment analysis focuses on understanding the customer’s experience with your service/app, identifying gaps, and training the chatbot itself to fill those gaps. AI-powered chatbots make communication between customers and banks easier and more accessible. They use automated scripts to resolve simple complaints.
With the help of chatbots, some banking institutions can even expand their customer network. For example, Bank of America generated more than a million new customers two months after introducing its chatbot. Personal banking apps powered by AI
Many banking apps offer personalized financial advice to help users achieve their financial goals, track income and expenses, and more.
This personalization is made possible primarily through AI-powered FinTech innovations. For example, Bank of America offers an app that helps users plan their spending through an AI-powered approach that’s personalized to each customer. In addition, the organization is also using AI to predict the probability of default of companies applying for loan services.
User behavior analysis
Artificial intelligence in FinTech can predict user behavior using AI API, which can also be leveraged to benefit FinTech banks and companies. For example, let’s say a user requests data about their spending for the last month – a single request. On the server side, with the help of AI, you predict their next request (e.g. last month’s revenue) and provide that information in the same response. As a result, you minimize the number of requests and load on your system accordingly. Users also benefit because the system works faster if the predictive analysis is correct. Fraud detection Fraud is one of the most pressing problems facing the financial industry today. According to Javelin, users and businesses lost $56 billion in 2020 due to fraud. Furthermore, the impact of fraud does not begin and end with financial loss. It also damages the business reputation and customer experience, which in turn can cost even more.
Therefore, it is not surprising that banks, companies and financial institutions try all the existing fraud prevention measures. AI is one such method, as it can intercept user requests or even access their accounts if the system detects potential fraudulent activity. As a result, the AI responds to suspicious activity before fraud occurs.
AI in FinTech: Wrap
AI in FinTech is used for many purposes: loan decision-making, customer support, fraud detection, credit risk assessment, insurance, asset management, and more. Modern FinTech companies are using AI to increase efficiency, improvised accuracy, and high-speed query resolution.
AI in FinTech drives innovation, leading to personalized, fast and secure services with higher customer satisfaction and global reach. Therefore, artificial intelligence in the financial markets will be here to stay!