How is AI helping to transform the financial sector?

Although digital finance was well established long before the onset of the coronavirus pandemic, like many industries, COVID-19 has accelerated the pace of change within FinTech as demand for online banking continues to grow.

Along with this shift comes the introduction of artificial intelligence (AI) and machine learning (ML), which have been among the key growth and sustainability drivers for financial companies.

Here, AI Magazine examines three different ways to apply AI within finance to harness growth and drive productivity.

Using AI for Fraud Detection

Fraudulent transactions cost economies a significant amount of money every year and are a significant problem for many financial institutions around the world. Not only does fraud have a financial impact on businesses, but it can also damage the reputation of a FinTech company.

AI can be used to analyze large numbers of transactions to uncover trends in fraud, which can then be used to detect fraud in real time.

When fraud is suspected by an AI model, it can reject transactions altogether or flag them to a team member for further investigation. Doing so allows investigators to focus their efforts on high-risk fraud attempts.

AI-powered customer support

There are a number of ways AI can improve customer support in financial firms, one of the main ones being the introduction of chatbots. AI-powered chatbots can not only minimize the workload placed on call centers, but they can also facilitate the customer experience for those with simple questions. This technology makes communication between a customer and a bank easier and more accessible by using automated scripts to resolve simple complaints.

By diverting simple tickets from customer service teams, chatbots free up time for employees to focus on more pressing and complicated matters, leading to a better banking experience.

Chatbots have also been proven to help develop financial institutions’ customer networks.

AI Loan Approvals

In the wake of the coronavirus, many are struggling to recover from the financial challenges brought on by the lockdown – it means demand for financial aid is at an all time high.

A big issue for lenders in the financial industry is the amount of work and time it takes to assess and approve loan applications. Manual underwriting can be a laborious process, but one that can be automated with specialized AI applications.

As it performs real-time analysis, AI has the ability to automate approvals for low-value loans and assist in the assessment of larger transactions, such as mortgage applications.

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