Artificial Intelligence and innovative services and products are spreading like fire. The companies and individuals who are a fan of technological developments follow the developments. AI provides multiple services and people unaware of new technology even use it extensively.
The modern approach towards the finance industry is the result of multiple technological interventions.
Current Market Size of the Finance Industry:
Presently the expansion phase of the finance sector in India is calling for innovation. The foreign portfolio investors have reached $899.12 million on November 22, 2018. Total Asset Under Management (AUM) in the Mutual Fund industry was on peak, at $340.48 in April 2018 till February 2019. IPOs (Initial Public Offers) raised in the period from April to June 2018 have increased to $1.2 billion.
Investments and Developments provide a new horizon to the upcoming future.
Future of Financial Services:
Leading financial services firms are achieving a higher market share with the AI initiatives they enroll. The finance sector is enthusiastic,about 70% of firms are part of the ML and 60% use NLP. The future of this sector varies in terms of revenues independent of the technology.
Artificial Intelligence brings dependability in the service sector and the finance industry is a prime service provider. The trust built over the last few years is changing the budgeting and strategy for involving AI. It provides an advantage to meet customer expectations and to gain a competitive advantage over others.
The scope of investments by 45% of frontrunner financial services firms are nearing to $5M. Risk takers are likely to win, as they are pro technological changes.
AI adoption increases the ability to solve the operational problems of a repetitive nature, or simple tasks like primary conversations with the basic level of Artificial Intelligence technology. Advanced level of AI brings in understanding power, perception and decision power.
Mobile wallet transactions in India expected to touch $492.6billion by 2022.
The Association of Mutual Funds in India (AMFI) is targeting nearly five-fold growth in assets under management (AUM) to Rs 95 lakh crore (US$ 1.47 trillion) and three times growth in investor accounts to 130 million by 2025.
Artificial Intelligence helps in credit decisions, risk management, fraud prevention, trading, personalized banking, process automation and enhancement of customer experience. AI is making the dream come true for the people who had weird ideas that machines can do wonders.
Humans are optimistic about AI technology, with expectations that it will bring transactional security, improved digital assistants, a high level of transparency in handling accounts, introducing process automation and foremost significant is the thorough checks of transactions and processes.
Types of Financial Services:
- Banking Services
- Investment Services
- Foreign Exchange
- Wealth Management
Software and mobile applications are improving accessibility to financial services and Artificial Intelligence is easing the process. Availing services was never so easy. Automation with AI, ML and NLP is a boon for service recipients.
Scope for AI-based automation:
1. Commercial banking Services: These financial services help businesses to raise money from market sources like bonds and equity. The primary activities of commercial banks if powered with AI can bring discipline to internal banking processes. Investment banking and retail banking are already exploring AI.
2. Venture Capital: It is a service that provides outside investors to companies with the potential of high growth. There is a surety of business when these investors bring in money for the business. AI can help in calculating risks and returns for the investors.
3. Angel Investment: An informal investor (angel investor) typically shares the resources and funds their investment capital. There are groups and networks of angel investors. AI can improve networking for connecting the right investment seekers and investors based on preferences.
4. Conglomerates: A financial services company is functioning in multiple sections that provide services such as life insurance, asset management, retail management, and investment banking can draw advantages with AI-based support apps.
5. Financial Market Utilities: Stock exchanges, clearinghouses and interbank networks and such organizations provide specialized services that require precision. AI-powered trading and banking are in high demand.
AI can assist in simplifying the service and improving its quality.
1. Smart Sales: The AI-based Chatbots are better in solving basic queries and responding using FAQs. With no or minimum human intervention, a virtual salesperson can take the customer through the stages of sales right from inquiry until closure.
2. Compliance: An enormous amount of financial data that is generated in banking and other financial services sector creates challenges for the service providers. Ai can identify the malpractices, manipulation and any loopholes found in personalized and classified services.
3. Evaluate Risks: Artificial Intelligence can consider the concerns and treat the user requests accordingly. Each financial transaction, loan or investment is accompanied by various risks that affect the business and thus the help of technology improves decision making.
4. Trading: Financial markets are prone to fluctuations yet many algorithms that try predicting the trends, using the old data. It can independently suggest, buy, sell or hold the stocks and notify us for the transactions or alert based on fed instructions.
5. Predictive Analytics: The spending habits, purchase frequency, other choices, investment portfolio, and transactional data lets AI guide for improving financial decisions and shares investment ideas.
6. Data Enrichment: Transaction data is simplified enough for the customers to understand and take control over their spending habits, budgeting, managing the credit score.
7. Smart Loans: The banks and financial institutes consider the credit score of the customer to approve the loans. Their banking history, income, tax payments, current financial situation, and past loan records are maintained by AI. It can easily bridge the gaps between creditworthy loan seekers and lenders.
8. Personalized Wealth Management: This service is for customers that have either huge bank balances or active investors in both the cases they are the favorite sales targets. The AI-based advisors provide the best advice to the customers based on the customer data available.
AI Performed Banking Activities:
1. Issue checkbooks
2. Credit cards
3. Interacting with customers for balances
4. Loan information and procedures
5. Online transactions
6. Electronic fund transfer
7. Pending documents
8. Send dispatch information
9. Make bill payments
10. Schedule payments
11. Utility bills
12. Repayment of loans
13. Assist in tax planning
14. Aid in foreign exchange
15. Foreign exchange processing and remittance
16. Send info on upcoming investment options in debt and equity
17. Calculate and inform about brokerage for transactions
18. Guidance for wealth management
19. Help buy an insurance policy, send quotes and renewals
20. Book new FDRs and renewal of FDRs
21. Ease to operate the accounts
Innovations that have changed this industry with traditional mindset functions are:
- Cleo: An AI-powered data-driven messenger helps manage their finances. It allows the users to link bank accounts and send money to their contacts of FB messenger. You can set a limit for savings and Cleo can keep that spare amount aside. Checks if you should spend money and is it affordable. It can warn users when they do not follow the financial limits and overspend.
- ZestFinance: This ML automated platform is an underwriting solution that assesses borrowers with no credit information. AI-powered platform can be implemented by the companies to automate lending and reduce losses occurring due to inaccurate data. Zest Finance can predict the risk and improve the business.
- Scienaptic Systems: It provides an underwriting platform that gives banks and credit institutions better transparency about the customers. It successfully holds 10 crores of customers. Scienaptic Systems uses myriad unstructured and structured data, transforms the data and learns from interactions to offer contextual underwriting intelligence. It could save $151 million of loss for a major credit card company.
- Eva Money: This AI-based mobile app is available on iOS and Android. It is voice and chat enabled and replies to all your queries relating to personal finances. Link the Eva Money app to your bank accounts and it provides a picture of your current financial holdings. It can even recommend increasing savings, improving credit score and other financial decisions.
- Trim: It analyzes your expenses and assists in saving money. It can even cancel the unused facilities or high-cost subscriptions, get you better options on investment and insurance requirements and even negotiate bills for you. VentureBeat reported Trim to save $6.3 million of 50,000 users.
- DataRobot: It provides machine learning-based software for data scientists, business analysts, software engineers, and IT professionals. DataRobot helps to build accurate predictive models that can enhance decision making for financial services. It deals with issues like fake credit card transactions, digital wealth management, direct management, and lending.
- WinZip: AI-powered finance app delivers automated financial services like investments, savings, and payments. The conversational AI ‘Misa’ is the most powerful financial chatbot, MintZip takes the support of Misa to consider the behavioral sciences and financial sciences for continuous training on financial aspects. It assists users in financial planning.
- Kesho: This software provides machine intelligence and data analytics to leaders in the finance industry. Kesho also used cloud computing and NLP, this speeds up the response to the questions from users. Kesho could predict the pound rate drop as mentioned in Forbes article.
- AlphaSense: This AI-powered search engine serves the banks, investment firms, and Fortune 500 companies. Natural language processing analyzes keyword search within research, news, and transcripts to discover the trends of financial markets. AlphaSense is providing great value to financial professionals, organizations, companies, traders, and brokers with the latest information on private and public companies. AI analyzes large and complex data and uses algorithms for quantitative trading that can automate trade and make them profitable.
- Kavout: It uses machine learning and quantitative analysis to process massive data that is unstructured. Identifies financial market patterns for price and SEC filings in real-time. Higher Kai Score shows outperformance of stock, it is an AI-powered stock ranker. Kavout selected stocks to have a higher annual growth rate.
- Kasisto: A conversational AI platform Kai improves customer experiences and reduces the volume of customers approaching call centers. Kasisto is the creator of KAI, a conversational AI platform used to improve customer experiences in the finance industry. Chatbots recommend daily financial decisions based on calculations. Kaisisto can be integrated with mobile apps to provide real-time support to customers.
- Shape Security: Top banks in the US use Shape Security restrains frauds of credit application, credential stuffing, cracking gift cards and other frauds by investigating and identifying fake users. The ML models are trained to identify between real customers and bots. Its Blackfish network uses AI-enabled bots to detect logins from different IPs, machines, and phones and alerts the customers and companies for the breach.
- Able AI: A virtual financial assistant that integrates with Google Home, Amazon Alexa, SMS, Facebook, web, and mobile to make banking more convenient. Able AI provides services like customer support, personal financial management, and conversational banking. The app also helps in budgeting, tracking expenses and working on savings.
AI-based financial services mobile app development is in full swing. Customers are focusing on the things that make a difference in their lives instead of looking for processes and trying to understand the terminology.
The evolution of financial services with the advancement of AI technology allows us to manage business risks, improves forecasts, assists trading, provides cybersecurity, detects fraud, betters personal banking and brightens user experience.
The technology of today is the future of industries tomorrow. Hammer the iron when it is hot applies to the adoption of advanced technology in every sector and finance is no exception. Financial services are awaiting a brighter future where humans are relieved of the pressure to perform better. Let AI guarantee the uninterrupted services for your valuable customers.