- Artificial Intelligence is bringing the much-required change in Fintech companies.
- Advancement of AI in Fintech can lead to shrink in the time for manual management.
- Drilling down into AI is becoming the new rage to make it more versatile for every field.
Consumers now have an array of options to manage their hard-earned bucks. From AI-Powered chatbots to data analytics, Fintech is certainly using the-computer-brain to address consumer pain points and reduce costs.
Though it sounds too good to be true, let’s still look at the statistics and figures that confirm the staggering increase in Fintech companies adopting AI.
- According to a study by Juniper Research, there’s an expected 3,150% growth in banking chatbot interactions during 2019-2023.
- Banks will be able to save 862 million hours using chatbot interactions by 2023
- Mobile banking apps will account for 79% of the total successful chatbot interactions by 2023
These numbers by Juniper Research make it evident that fintech start-ups regardless of their size, adopt Artificial Intelligence and Machine Learning technology for proper administration.
To properly determine how AI is becoming a top Fintech trend and is influencing the increasing growth and rise of new technologies in the industry, let’s know the existing role of AI in Fintech.
Artificial Intelligence in Fintech
Often called Financial Technology, FinTech is an innovation in the financial market, driven by technology. It includes products and services such as fraud busting and financial transaction management.
The exceptional growth in FinTech companies has made it easier for consumers to manage their income, expenses, and liabilities. However, it wasn’t even imaginable a decade ago unless AI arrived. From salespeople to customer care executives, today AI-powered chatbots are used by numerous FinTech companies, regardless of their size. Moreover, in recent years, financial technology has seen exponential growth in the market.
Traditional banking systems are also inspired by FinTech companies and their revolutionary technology. They've also produced their AI-based technology to help them address customer pain points and reduce costs.
For example, Online payment apps like Alipay App has a feature- Alipay's smart customer service, that can handle 2 million to 3 million user queries on a daily basis. The interesting thing is that it only needs one second to complete five rounds of queries, which is 30 to 60 times more efficient than any human service.
Top 7 Ways AI Transform FinTech in 2021
The relationship between FinTech and AI is certainly praiseworthy as they help in reshaping interaction that people carry out with finances. Ever since multinational banks dominated the financial market, the personalized banking experience has been lost. However, AI regained the personal touch with social simulation and better cognition.
1. Better Customer Service
Customer service will improve greatly by AI in FinTech companies. With technologies such as virtual helpers and chatbots powered by machine learning, FinTech will enjoy a highly reliable way to interact with customers. Moreover, automated solutions for basic consumer queries will result in reduced helpline and front office costs.
Additionally, since AI follows and understands workflow with no risk of duplicated processes and errors.
With the use of AI conversational platforms and softwares, companies can bring a lot of difference in improving the customer experience. For example, a conversational AI for Insurance Company Tryg resolves almost 97% of all internal chat queries. The company uses its internal virtual agent to help find answers to customer queries with a success rate of 97%.
Another example is that of a conversational AI platform called KAI by Kasisto company. The company claims to help banks and financial institutions develop chatbots for a better customer experience using NLP. Users can deploy their chatbot on messaging apps and websites such as Facebook or Whatsapp.
2. Enhanced Security
AI is bound to become successful in the FinTech sector because it provides better and enhanced security. Cybersecurity solutions powered by AI typically consist of chatbots that can grant escalated privileges and reset forgotten passwords when required. However, for the FinTech industry, AI accounts for the analysis of large raw data and detects suspicious activities and patterns.
3. Stats and Analytics
With a quick decision-making ability, AI will provide highly-detailed insights to FinTech organizations. This would be a complete game-changer for sectors that heavily rely on gathering and sorting of consumer data. Stats and analytics are mostly used to predict the market, keep track of customers, look into the customer profile before lending a loan and so much more.
For example, Payoff assigns personal loans that help customers pay off their credit cards and improve their financial ratings.
Another example, Kensho provides machine intelligence and data analytics to leading financial institutions like J.P. Morgan, Bank of America, Morgan Stanley and S&P Global. According to Forbes article, traders with access to Kensho's AI-powered database during the Brexit days used the information to predict an extended drop in the British pound.
4. Chatbots and VA’s
In the FinTech sector, personalization plays a major role in an organization’s growth. AI analyses an individual deeply to provide a very personalized banking experience to individuals. AI can work alongside codes to provide a human-like service to every customer without any cap on the capacity.
5. Regulatory Auditing and Compliance
Financial compliances and regulations change very often. This makes it complex for financial institutions to comply with the laws while providing their services in a timely and efficient manner. AI has the capability to learn and comply with laws that can affect services such as government asset management.
6. Financial Forecasts
With the power of deep learning and artificial intelligence, it’s now possible for machines to provide market predictions as accurate as finance experts. The cult of traders – Wall Street has also adopted AI to forecast market movements. A certain number of technologies can analyze companies based on numerous variables like press releases, earning calls, and semantics. Additionally, AI in Fintech can also assess big data for a variety of factors.
7. Reduced Manual Work
AI technologies such as neural networks, machine learning, and data analytics can greatly improve the FinTech industry by reducing manual work. For instance, AI can generate expenditure reports faster than a human with little or no errors. It can also help human workers to automate and track several processes required for data entry, compliance, fraud and security, and a lot more.
The Takeaway
In a nutshell, AI can greatly improve the FinTech industry in 2022 by personalizing the user experience, enhancing security, and automating several processes while adhering to the laws and compliances of the industry.
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