Artificial intelligence is one technology that is revolutionizing many sectors. In fact, many sectors have now improved their ways of operations, service delivery, and faster processes thanks to AI.
The financial industry, for instance, has seen major changes. May finance companies have already adopted the use of AI in their operations, and the few remaining ones are on the move to integrate AI in their operations.
Again, businesses can review and analyze the trends of their business operations because many financial transactions are done through apps. These valuable insights help business owners know the changes they should make to impact the business positively.
Therefore, AI in fintech does not only help individuals, but even established businesses at large. That is why this guide explores different use cases of AI in the fintech industry.
What is AI in Fintech?
Fintech is simply financial technology, and AI is simply artificial intelligence technology. AI in fintech, therefore, is the digital integration of improved technologies in the financial sector to improve overall operations and satisfy user requirements.
In the financial sector, AI helps in detecting fraudulent activities, analyzing business trends, receiving instant and continuous feedback from users, and automating tasks to speed up the processes, among other many uses.
Use cases of AI in Fintech
Under this section, we explore areas in the finance sector where AI plays a key role in enhancing processes. Below are some of the major use cases of AI in fintech:
The finance sector is one of the delicate sectors. It deals with personal data which is confidential, hence the need for a strong security system to protect confidential information.
AI is playing a big role in strengthening the security in the finance sector. Fintech companies and other financial institutions are now integrating AI-powered chatbots in their operations, which improves security in different ways. For instance, resetting passwords and allowing access.
Another way through which AI enhances security in the fintech sector is the use of fingerprints, facial, and speech recognition to navigate through the processes. This makes it hard for hackers who can crack basic passwords to gain access to private information and exploit it, thus risking the client and the business at large.
Since many businesses are now adopting online processes, financial institutions are at a greater risk as they handle lots of billions every other minute. Such institutions require a strong security system that will safeguard all the information and transactions, and that is where AI comes in.
Improved Fraud Detection Measures
Nowadays, financial scams are on the rise, especially in the online space. Many times, you will come across loan application scams, fake credit cards, illegal money transfers, and baseless insurance claims, among many other financial scams. If not keen enough, a person or even a well-established financial institution can lose millions in a matter of seconds. This can cause a business to make a huge loss and ruin its reputation, especially for other clients in the future.
However, no business is ready for this, and that is where AI comes in to salvage the situation. Most AI-powered technologies used in financial institutions have a higher capability of detecting fraudulent or suspicious financial activities. Especially for big businesses, it can be hard to keep track of every single transaction within and detect any possible fraud activity manually.
With a solid AI system in the financial sector, AI algorithms make it possible to detect any strange activity throughout the transactions and processes in real-time. This helps a person take immediate action before the worst happens, thus saving the whole situation.
Enhanced Customer Service
Just like in any other sector, clients in a financial institution look forward to a seamless experience and instant feedback at any given time from the service providers. While this can be seen as an impossible task when done manually, AI makes it possible.
Through AI solution, financial institutions can now respond to clients 24/7 on matters of transactions and answer any questions to clear the way. In fact, your business is likely to fail or lose potential customers if the response pattern is poor.
Besides, call centers can be overwhelmed with the processes, and that is where AI comes in. Through AI technologies such as AI virtual assistants, AI chatbots, and other AI technologies, it is easy to handle the workload by setting a common algorithm pattern for the same inquiries. Such a system makes work easier for the customer service team, and it simplifies the processes of handling complex inquiries.
Still, AI is enhancing customer experience by evaluating customer trends, discovering gaps, and training chatbots to cover the gaps. This whole experience makes communication between the financial service provider and users easier and simplified, thus building a good relationship. In the end, customer satisfaction enhances business growth.
Personalized Banking Services
Of course, financial institutions attend to many customers every other minute. When done manually, it can be a hard task to reach out and meet every customer’s needs. Some customers will end up receiving poor services, while some will end up not fulfilling their requirements, and this risks business closure.
However, with an established AI system, you can personalize all the services, which will help grow the brand and increase trust and loyalty among the customers.
For instance, many users now download banking applications to simplify the processes. The AI system can easily collect and evaluate customer data to personalize the financial services of an individual user. Besides, these banking applications help users track their spending habits, enabling them to adjust where necessary.
Without a proper analysis, it is possible for financial entities to make inappropriate business decisions. However, with AI, algorithmic trading can analyze the set data quite faster, establish market trends, and follow the appropriate patterns to drive the business in the right direction.
This is an automated AI system that ensures all the financial-related decisions are based on the market trends to minimize human error, minimize losses, and maximize returns, a move that scales the business higher.
What are the benefits of AI in Fintech?
Of course, the use of AI in financial institutions has helped companies in many ways. From improving security to automating the processes. Below are some of the major benefits of integrating AI in fintech to help companies achieve their set goals:
Improved User Engagement
Through AI, it is easy to monitor and track user habits on their finance apps. This makes it easy for the user to ask questions and get instant answers, thus improving user engagement and personalizing the processes to respond to individual preferences.
Through AI technologies, employees, especially the customer care team, who have common and repetitive tasks such as answering common questions, tracking transactions, and categorizing clients, can automate the processes to save time and maintain a high level of accuracy.
Of course, an AI system in any financial institution offers a platform for continuous payment monitoring and a closer user verification process to ensure security measures are in place. It can be hard for humans to do this manually.
Reduced User Support Cost
With an established AI system for your financial setup, you don’t need to worry about human errors that can lead to a significant loss. The AI system has a higher accuracy level and has the power to detect any activity that can make your business make a loss. Besides, with a well-established AI system, you don’t need a support team, which could cost you extra money.
Data-Based Decision Making
AI helps perform varied tasks that will make informed decisions that will escalate your business growth. It does this by collecting documents, generating reports, and making predictions. The insights gathered are valuable when you want to take the next action as far as your business is concerned.
Fintech is growing at a rapid speed, and so is AI. As the fintech market grows, the need to automate the process and enhance overall performance also grows. That is why integrating AI in fintech is a viable solution to achieve the desired objective. In any case, AI technologies will help finance specialists and business owners to understand industry trends, learn other competitor’s patterns, and create a plan or strategy to scale the business higher through the use of AI.
Want to integrate AI in your Fintech Project? Connect with our fintech development company and get complete consultation from our experts!