The emergence of artificial intelligence as a mainstream technology has come quickly. There are several industries that are starting to implement AI into their daily operations. Specifically, the fintech industry has already found various uses for it. Even though most businesses are just scratching the surface of what’s possible with AI, there are several use cases in fintech. Let’s look at some of the ways that the fintech industry is already taking advantage of AI to benefit themselves and their customers.
Fraud Detection
With a heavy reliance on digital transactions these days, cybersecurity is of the utmost importance for fintech companies. They not only have to protect their own interests but they also have to protect their customers. One thing that AI excels at is identifying behavior that is unusual and potentially fraudulent. More importantly, AI is able to do this in real time, alerting companies right away if a customer conducts a transaction that’s out of the ordinary. As a result, companies will have a head start on investigating potential fraud and notifying customers that something could be wrong so that the issue can be resolved quickly and any instance of fraud can be stopped as soon as possible.
Customer Service
Even if AI is helping to conduct transactions and check for fraud, customer service is still critical. Of course, this is another area where AI can be helpful. With chatbots generated by AI, customers can have their questions answered quickly and more effectively without sacrificing personalized support. The AI-powered chatbots will be able to handle most customer concerns faster than a human customer service representative. This will free up customer service reps to handle the most pressing issues, improving efficiency for both companies and customers. It’s not just fintech that’s jumping on the AI customer service bandwagon. Everyone from traditional retailers to emerging industries like real money casinos is utilizing AI to improve their customer service.
Risk Management
A significant part of what fintech companies do is manage risk. They have to be able to judge the risk levels of every decision and determine whether it’s worth the risk or not. With AI models, it’s easier than ever to analyze trends and identify potential risks. For instance, data about customers can be analyzed quickly to determine how likely that person is to default on a loan. This type of AI analysis can replace traditional methods of making decisions based on someone’s credit score and other factors. All of those elements can be analyzed quickly, enabling fintech companies to reduce their risk while also making faster decisions that will ultimately benefit customers.
Automated Trading
For companies that work with the stock market or need to master the art of buying and selling at the right time, artificial intelligence can be useful. Companies can create algorithms that take into account pricing trends and other market data to identify the exact right time to buy or sell. This can even go to the next level with automated trades because AI can be trained to conduct transactions when the right conditions are met. This can improve efficiency while taking the possibility of human error out of the equation.
Automated Financial Advice
The days of needing to sit down with a financial advisor or planner could soon be over thanks to AI. It’s now possible for AI to analyze a customer’s financial history and goals along with market trends and patterns to create the best financial strategy and offer advice. Again, the human element can be taken out of the equation without sacrificing personalized recommendations. Not only is this a more efficient way for fintech companies to operate, but AI can also make financial advice more accessible for everyone, allowing more people to have a clear strategy for managing their financial portfolio.
Financial Forecasting
Last but not least, AI can give fintech companies the ability to make long-term, big-picture predictions. It can analyze data from a variety of sources to make predictions about how certain markets will perform in the future. This isn’t just about market or consumer trends; factors like weather and politics can also be included in the calculations of an AI model. If there is economic trouble ahead, AI forecast can help a company prepare for it. At the same time, companies will be able to predict what products, services, and strategies will be needed for future success based on those AI forecasts.
