Machine learning and artificial intelligence could be the future of everything in the fintech sector. By adopting intelligent solutions, financial institutions gain a serious competitive advantage to cope with the industry’s ever-changing landscape.
Typically, the integration of artificial intelligence improves outcomes because the technology applies techniques based on common aspects of human intelligence but beyond the human scale. In this context, AI empowers business processes by providing a deeper understanding of customer needs.
Technological trends shaping the fintech sector
The introduction of technology in this sector has greatly simplified banking. People can now perform basic banking-related tasks online, mostly from any device with an Internet connection. As noted in one study by Financial Express, the fintech industry is keeping a close eye on advances in technology.
Some technology trends that will continue to shape the industry further are:
- Robotic Process Automation (RPA), where advanced technology and robots will perform tasks that were previously performed by humans.
- Blockchain integration to increase the transparency of financial transactions.
- AI and OD. The sector will be largely characterized by machine learning (ML) and artificial intelligence (AI).
- The introduction of biometric security systems that allow people to perform most banking tasks remotely.
How AI is transforming the fintech industry
Fintech is among the growing sectors, even despite the economic turmoil caused by the pandemic. The financial sector adapts to the new reality thanks to introducing the latest high technology, mainly artificial intelligence.
The use of artificial intelligence has significantly changed how the financial sector operates.
Here are five ways artificial intelligence is transforming the fintech industry:
1. Customer credit analysis
AI is used to analyze credit accounts, cash accounts, and investment accounts to determine a customer’s overall financial health. This helps banks monitor changes in real-time as AI creates customized recommendations based on any new incoming customer data.
Unlike in the past, banking institutions can process vast amounts of information about their customers. This data is compared and analyzed to determine whether the customer is a good fit for the product or service requested.
2. Process control and optimization
Today, process automation is rapidly evolving to cognitive process automation, whereby AI systems can even perform complex processes.
The year 2020 showcased the advanced application of artificial intelligence to perform complex tasks. Some new blockchain technologies have immensely automated trade finance. Now the technologies enable the scanning of documents, enhancing accuracy and cutting down the time to check the trading rules and regulations.
Fintech players benefit from AI-based technologies to streamline standard business processes. They are doing manual work, and technology is rapidly taking over, making business processes more efficient.
Process optimization is being applied in various departments, including sales, call-centers, accounting, and training and development.
These automated processes boost the institution’s overall productivity.
3. Fraud detection
When we talk about the financial sector, fraud has always been a big problem. However, credit card companies are implementing predictive analytics into their fraud detection workflows with artificial intelligence, significantly reducing false positives.
AI’s analytics tools collect and analyze data by learning and monitoring users’ behavior patterns. This helps identify rarity and any warning signs of fraud incidences and attempts.
4. Bots for customer support
Although they have been here for a short time, financial institutions are rapidly embracing them. Gradually, potent chatbots have been implemented to improve interactions with customers.
Due to lockdowns and other restrictions, financial institutions are using AI chatbots to solve customer issues remotely.
5. Automated virtual financial assistants
Nowadays, even those with no experience in the stock market can participate thanks to robot advisors. Virtual assistants and planners recommend stocks and bonds to sell or buy.
As technology continues to advance rapidly, artificial intelligence and machine learning might be the future of the fintech industry. It is, therefore, advisable to analyze your business processes and spotlight areas in which AI can be applied.
If you need assistance in creating custom software to improve your operations and open new markets, please contact Altezza Creative Solutions. We are a global software development firm that takes a human approach to solving problems.