How can Artificial Intelligence be used in financial services 2021
Artificial intelligence (AI) applied to finance can reduce costs, increase efficiency and transform a company’s cash management strategy. The financial sector was one of the pioneers when it came to implementing financial technology (or fintech ), such as artificial intelligence (AI), and its fame continues to increase among financial institutions. AI and machine learning (ML) tools rank at the top of the rankings of the most revolutionary technologies in the financial services space listing and artificial intelligence in financial services .
Artificial intelligence is capable of automating tasks, which increases the efficiency of processes, and uses machine learning, deep learning , predictive analytics and natural language processing to create more powerful features, such as chatbots and automated advisors. 80% of banks are aware of the benefits of AI for financial institutions.
The incorporation of artificial intelligence to their fintech arsenal helps banks and financial institutions optimize their customer experience, reduce costs and increase their revenues.
How do banks and financial institutions use AI?
Here are some of the applications of AI for financial services that can add value to customers while reducing costs.
Smart automation to reduce costs and time
Automating routine tasks saves financial institutions costs and time while minimizing errors and collecting data.
66% of financial industry leaders expect to focus even more on automation in 2021 and predict that it will be more difficult to meet automation-related goals.
The artificial intelligence software can be applied to different operations and financial processes. We will explain how to get it:
How AI can contribute to expense management
An AI solution is able to read receipts and distribute them by category based on lists of expense types or authorized vendors that have been previously uploaded to the system. It is still necessary for workers to review the expenses that it rejects.
How AI can contribute to accounts payable management
Artificial intelligence is able to extract and compile invoice data into PDF, allowing teams to focus on more complex tasks.
How AI can contribute to regulatory compliance
AI-powered tools are capable of analyzing documents, using natural language processing and machine learning, to search for specific terms that denote compliance with standard regulations, such as the GDPR .
Automating processes through artificial intelligence does not replace the work of workers, but offers them the opportunity to focus on the most complicated tasks.
Predictive analytics to make informed decisions
Most finance teams spend almost half of their time gathering information and cross-checking it to generate reports and calculate predictions. Artificial intelligence is able to save teams time, generate reliable predictions and reduce the chances of errors.
For example, artificial intelligence and machine learning can predict customer payment patterns. If a customer is deemed to be paying late for their behavior on previous occasions, the company may remind them of the pending payment further in advance than is necessary for customers who tend to pay on time. This is known as the machine learning enhanced accounts payable process.
This particular method helped Iron Mountain, an information management and storage services company, reduce its processing times for invoice settlement by 40.
Artificial intelligence and predictive analytics also help financial institutions assess and manage risks; 42% of banks and investment services are already using AI in risk management or considering doing , It also helps to reduce the risks associated with making loans to clients and increases the chances of detecting fraud.
Personalizing the customer experience
Through the use of artificial intelligence, financial institutions can obtain really valuable information on customer satisfaction and personalize their experience.
For example, instead of relying solely on a person’s credit score, using solutions powered by artificial intelligence, banks can take into account other factors in their financial history, such as repayment patterns or the number of credits they receive. is paying at that time. This information can be used to personalize the customer’s interest rate.
Artificial intelligence also helps customers manage their portfolios more effectively. They can do it through automated advisors or digital capital management, two possibilities that are experiencing a real boom. To illustrate this, Axyon AI, using deep learning , creates investment strategies, allocates assets and warns of inconsistencies in the market.
AI tools can reduce the investment of company capital and worker time, and the use of tools that are powered by artificial intelligence, such as chatbots , conversational AI, automated advisors and analytics, can help improve the customer’s experience with the company.
How challenging it is to implement artificial intelligence in finance
Despite all the benefits of artificial intelligence in financial services, some leaders will continue to have doubts. The two most important deterrents for companies when it comes to the implementation of AI technology are fear of the uncertain risks it poses and total ignorance of how to start using it.
To mitigate the risks associated with artificial intelligence, one should consider whether the AI solution to be implemented is easy to understand and can be explained. In addition, it is important that the use of AI is not kept secret and is only available to data scientists and developers.
Training programs can also be configured to make staff aware of the risks of artificial intelligence. It must be ensured that data privacy regulations are respected and that the necessary security measures have been taken to protect all operations in which AI is involved.
Interested to Read more: benefits of AI in finance