The benefits of Artificial Intelligence in financial services are multiple and hard to ignore, it is transforming the sector in several ways.
FREMONT, CA: Some years ago, Artificial Intelligence was just a term, but now it is ruling and leading most of the industries. It is solving many problems in the world with its technological powers. In the banking sector, it optimizes sales and price, as well as prevents fraudulent transactions.
Here are some examples of AI in finance sector:
1. AI and Credit Decisions
Artificial Intelligence gives a more accurate and faster assessment of a potential borrower at less cost and accounts for a wider variety of factors, which leads to a better-informed, data-backed decision. Credit scoring provided by AI is based on more compound and sophisticated rules compared to those used in conventional credit scoring systems. It helps lenders distinguish between high default risks applicants and those who are credit-worthy but lack an extensive credit history. The machine is not biased like humans, and objectivity is another advantage of the AI-powered mechanism.
2. AI and Risk Management
It’s hard to overestimate the impact of AI in financial services when it comes to risk management. Vast processing power enables vast amounts of data to be handled in less time, and cognitive computing helps to manage both unstructured and structured data, a task that would take far too much time for a human to do.
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3. AI and Fraud Prevention
Nowadays, artificial intelligence is battling financial fraud successfully, and catching up the criminals quickly. AI prevents credit card fraud, which has been increasing exponentially in recent years due to the increase of e-commerce and online transactions. Fraud detection systems analyze clients’ behavior, location, and buying habits and trigger a security mechanism when something seems out of order and contradict the established spending pattern. Banks also use artificial intelligence to reveal and prevent another infamous type of financial crime: money laundering.
4. AI and Personalized Banking
AI provides additional benefits and comfort to individual users. In banks, AI provides clients with comprehensive self-help solutions with the help of smart chatbots. Voice-controlled virtual assistants powered by intelligent tech like Amazon’s Alexa are also gaining traction fast.
