With constant technological developments, it’s only normal that there are always new areas where artificial intelligence can be used. In addition to AI, machine learning and deep neural networking are also finding their place in the world. From business operations to personal everyday activities, AI’s impact on the world is seen through countless applications. Therefore, it being a part of the financial sector should come as no surprise.
Ways in which AI supports finance are countless, however, we will discuss only some most important ones.
Managing risk
Time is of the essence in the world of finance. However, making rushed decisions can lead to a risky investment. This is where AI can step in and properly assess all the risks that accompany a certain prediction. Machine learning is applied in order to analyze the history of a certain case, create a precise model for the financial experts to follow, and identify all potential risks and problems before they arise.
Seeing as how the use of ML allows for faster processing of information compared to how long it would take human teams to do so, the decisions can be made in a much shorter timeframe and save companies and individuals a lot of money. Whether it’s predicting how currencies will behave in the near future or combat money laundering, AI can be very useful when it comes to risk management.
Preventing fraud
While it can be argued that implementing technology into so many spheres of life has made everything easier, it has also opened the doors to fraud. As individuals and businesses are sharing sensitive data online by paying bills, depositing checks, and trading, reliable methods that would help detect fraud and protect that data are necessary. Even though there are human analysts whose job is to do this, implementing AI can help strengthen these methods and improve the accuracy and efficiency of fraud detection services.
Artificial intelligence can review a person’s spending history and behavior and learn to notice alarming irregularities. Relying on AI here can lead to identifying bots and fake users and thus curb credential stuffing and credit application fraud as well as identify compromised information and reveal hidden attackers.
It enables automatization in currency trading
Artificial intelligence is used to identify patterns by processing large data sets. In terms of currency trading, these patterns are also known as signals that come in different types. Automated or algorithm-based signals go through various charts in detail and make predictions that can be relatively accurate, something explained in detail on toponlineforexbrokers.com. Seeing as how this approach is the same as that of a human but without any emotions involved, it can lead to great results. And, as everyone in this kind of business knows: “Time is money”. By implementing automated trading practices, traders can save valuable time.
Even if not every signal is 100% accurate, most advanced traders choose to use these signals on a daily basis. However, they will tend to evaluate the signal themselves before acting on the prediction.
Allowing personalized banking solutions
When it comes to banking services, there are now smart chatbots that utilize the power of artificial intelligence in order to provide customers with comprehensive solutions to their issues. This will not only provide clients with a faster response but it will also reduce the workload call centers are facing.
Amazon Alexa, Google Home, and other virtual assistants that are controlled by voice are growing in popularity with each passing day and they allow individuals to check their balances and schedule payments. Mobile banking apps are also there to make interactions with banks much more convenient as well as give payment reminders and offer personalized financial advice.
Making credit decisions
As can be seen from previous examples, artificial intelligence is used in many fields to help inform decision-making processes. The same applies to credit. When compared to traditional systems that are used to score someone’s credit, AI assessments are much quicker and cheaper.
What is more, models that are powered by AI have the upside of being completely objective when reviewing a potential borrower’s credit history. Borrowers with little to no credit history are often seen as a high-risk group but with AI-powered solutions, there is a transparency that helps lenders better assess these individuals.
By streamlining various processes, artificial intelligence is transforming how individuals and companies interact with their finances. From making informed decisions to preventing fraud, AI has found its place in many areas of the finance sector and its impact will only continue to grow.
