Artificial intelligence and Machine Learning are paving the way for new FinTech growth opportunities. AI, ML transform the financial services industry, bringing significant benefits to consumers and FinTech companies, such as more efficient processes, better financial analysis, and improved customer engagement.
According to a survey conducted by the Economist Intelligence Unit, 54 percent of Financial Services companies with 5,000 or more workers have implemented AI. According to the research, 86 percent of financial services executives want to increase their AI-related expenditures by 2025.
Although the terms Artificial Intelligence and Machine Learning are frequently used interchangeably, they are not synonymous. AI is a branch of computer science that allows computers to tackle issues previously handled by humans. It is a catch-all word for machines that can mimic human intellect and has many applications in today’s society, including machine learning. AI, ML applications allow computers to automatically learn from data and improve over time without explicitly coding. Machine learning may assist in generating, managing, and interpreting data, resulting in invaluable insights.
Artificial Intelligence and Machine Learning provide numerous advantages in the financial services business. Companies that utilize AI, ML to develop prediction models instead of depending entirely on human workers can analyze massive data, improve working procedures, and reduce fraud. The following are instances of how Machine Learning technologies are utilized in the financial sector to improve customer service and drive the business ahead.
- Less Biased
Bias comes naturally to us, and we may utilize facts selectively or make intuitive judgments about other individuals based on their age, gender, or race. AI will, in most circumstances, be less prejudiced than humans. That’s not to suggest AI is entirely objective. When a machine learning algorithm is taught on consistently biassed data, it will generate biassed decisions. Organizations must keep current to identify how AI can enhance fairness and where ML and human intelligence can work together to eliminate prejudice. This may be especially beneficial in areas like loan servicing and assessing an acceptable credit level without the need for humans.
- Less Time
Because models are updated in near-real-time, if not real-time, AI/ML is quicker than manual procedures. A model can anticipate the behavior of millions of users in seconds when it is incorporated into an automated decision-making system. If the predictive models were manually maintained by humans making the same decisions, it would be prohibitively expensive to create the same processing capacity. This perk comes in handy when it comes to making complicated financial decisions.
Because predictive models can make faster, and hence cheaper, judgments than human specialists, they replace or augment human talents. Because ML algorithms rather than humans handle the updates, AI/ML is generally less expensive to implement than its human counterparts. The initial investment and ongoing expenditures are insignificant as compared to engaging highly skilled human specialists.
- More Scalability
AI/ML can handle a high number of micro-segments. Micro-segmentation powered by artificial intelligence breaks apart huge consumer groups established by traditional macro-segmentation approaches, allowing businesses to connect with customers in more personalized and tailored ways. Micro-segmentation implies higher conversion rates and more precise targeting.
- Enhances Client Satisfaction
Consumer engagement may be increased by utilizing AI to understand the customer better and take advantage of real-time decision-making and predictive analysis. Product suggestion engines, for example, are beneficial in providing a personalized experience while also increasing income. Product recommendation engines are a type of artificial intelligence (AI) that makes recommendations for each user based on various criteria such as previous behavior, in-session activity, product economics, and the behaviors and preferences of similar users.
Choosing the right AI-powered product and setting up the right data inputs and workflows may be time-consuming for businesses. A grasp of how AI works, the benefits it provides, and its many applications are required. Partnering with an experienced professional who can create and integrate a plan that best matches your requirements will help you take your business to the next level utilizing AI/ML.