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Trusting Artificial Intelligence (AI) money management is quite challenging and a little unimaginable kind of advances? Isn't it? Do you really think AI can cope with this unfamiliar task? While there is skepticism on the mind of ordinary people, skilled financiers are gradually bringing this technology to their financial service. The giant banks in the United States are Bank of America, Wells Fargo, JPMorgan Chase & Co., and Citibank.  

The finance sector is growing and going through drastic changes. AI is reshaping the building blocks of success in financial services by replacing the traditional business models, and strategies and heading towards providing more consumer-centric, personalized, data-driven approaches. To stay relevant and competitive in today's digital world, not only companies are switching to fintech solutions rapidly but also striving for innovative solutions that can help them to provide better-personalized services to customers and achieve better operational efficiency. And that's where AI moves into focus. AI is disrupting the way financial companies generate and utilize insights from data. AI technology is driving new forms of innovative business model, reshapes competitive environments, and poses new challenges to the financial firms and institutions.

Look at the Stats of AI in the financial services industry

  • According to a new global study entitled Transforming Paradigms: A Global AI in Financial Services Survey, supported by EY and Invesco, it shows the impact AI will have on financial institutions, from business models to changes in the workforce.”
  • By 2030, FinTechs anticipate AI to expand its workforce by 19%, while financial service providers expect AI to replace nearly 9% of all jobs in their organization.
  • According to Global Fintech Report 2017, supported by PWC, over 30% of big financial institutions have already invested in AI this year.
  • The fintech startups that are AI-based fetched over 1 billion dollars in funding in 2017.
  • About 80% of executives and bankers respond that AI will revolutionize the way the financial industry gathers information and interface with customers.

What is artificial intelligence?

Artificial intelligence is a set of technologies that are enabled by adaptive predictive power, and manifesting a certain degree of autonomous learning that significantly advances our ability to:

• Recognize patterns

• Anticipate future events

• Create ethical rules

• Communicate with other people.

• Make better decisions

How AI is transforming the fintech sector

Regulatory & Compliance

A recent report says that banks are spending on regulatory compliance around 70 billion dollars per year. You can reduce your expenditure by 30% on regulatory compliance by using AI-based tools and practices. And also, data can be transferred 3X times faster with AI-based tools.

A program named Contract Intelligence was recently launched by JP Morgan Chase that can help to review the commercial loan agreement documents in seconds. Otherwise, at the traditional time, it takes 360,000 hours/year for manual checking work. The implementation of AI not only makes the regulatory compliance faster but also decreases the chances of error-prone too.

Credit Scoring & Lending

Now credit underwriting is no more arduous task for lending companies. With automated data analysis and validation via Machine Learning (ML) algorithms, credit scoring, and lending has become now more efficient. There are some companies that are doing it instantly on the point-of-sale (POS) to lend customers money on their online purchases. This is something that is unimaginable in traditional lending.

In addition to this, Some ML credit scoring platforms are helping companies to enhance their approval rates by scrutinizing non-traditional data like the data of customers' rejection and their expenditure behavior. By analyzing the data of customer behavior, lenders can now evaluate problematic cases better, and thus can provide more personalized solutions to customers.

Personal Finance & Assistance

In this tech-savvy age, organizations now not need to rely on financial advisors for saving and investment-related decisions. With algorithm-based chatbots, companies can quickly make saving and investment-related decisions. But HOW? Such chatbots evaluate the customers' investments by utilizing advanced data analytics and thus help you in making wiser and more rational decisions.

Some companies have already started using AI-based smart chatbots for lots of personal finance intentions, including – managing online accounts, reports of expenditure, labeling customers' common queries, sending reminders about payments/investment opportunities, and even making online transactions.

Concluding Thoughts

The future of financial services lies in its expertise to fully leverage the potential of new emerging technologies. AI is a new technology that will entirely change the looks of both front and back-office operations, create significant shifts in the structure and regulation of financial markets, and foster crucial challenges for society to resolve. Nothing less than a collaborative effort will triumph over these challenges and unlock AI's benefits for the best interests of business and community.

It is becoming necessary to have technology-driven solutions to deal with the financial services of your business. But the big challenge most companies facing is that they don't know how to implement these changes, and also they don't have the right talent for AI implementation.

We would recommend you partner with an experienced mobile app development company in India for digital transformation so that they can provide you a robust tech solution to gear up their offerings for the next-gen financial services.

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