Artificial Intelligence boosts the financial industry, bringing innovations and modern tech solutions. Markets and Markets research claims that the global AI in the FinTech market will grow to 7,305 million by 2025.
These days, we start using AI in our financial operations. There are a bunch of hardware and software developed to enhance the financial field.
In this guide, we’ll discuss how AI-based FinTech software development can improve interactions between people and machines.
Benefits of Artificial Intelligence (AI) in FinTech
First of all, let’s single out several advantages of using AI for the FinTech industry.
Benefit #1. Better Customer Services
How do people communicate with the customer support of the financial organization? By phone or online chat. However, people get tired and make mistakes. Also, they need to have rest, so they can’t give instant feedback to the customers.
Using Artificial Intelligence, it’s possible to build a chatbot and a Robo-advisor.
Chatbots are available 24/7, so they can answer questions without delays. What can chatbots also do for FinTech?
- They can notify users of all changes.
- Manage their account upon request.
- Work with users’ complaints.
- Provide users with helpful information.
- Offer solutions to users.
Chat bots allow increasing customer’s trust and loyalty.
Robo-advisors are similar to chatbots, but they were developed specifically for the FinTech industry. Also, robo-advisors can perform a bunch of other tasks. They can assess investors’ tendency to risk, choose an investment strategy.
Robo-advisors have one more benefit.
To invest money wisely, people need professional advice. But human advisors’ services are quite costly. Robo-advisor allows you to involve more people in your business since it is much cheaper.
Benefit #2. Fraud Predication
AI allows solving a bunch of problems connected to financial fraud.
Let’s single out several cases.
- The system can memorize thousands of possible fraud cases and can identify hidden ways of frauds.
- The system functions 24/7, so you can get instant results.
- AI-based software learns from users and their behaviour. As a result, it’s possible to predict frauds when the actions contradict standard behavioural models.
FinTech software should have Artificial Intelligence. It allows for increasing the security issues for your customers. AI in the banking sector is predominantly explicitly used in the fraud detection area. People need to feel safe using your software. In this case, they trust you more. It leads to your success.
Benefit #3. Risk Assessment
There are a lot of risks in the case of lending. Artificial Intelligence analyzes the clients’ information to understand possible risks. So, the banking system is also more protected.
For example, you can use machine learning technology to analyze and predict credit risks.
Visual identification and verification
Visual identification helps P2P lending fields verify the identity of the users that want to take a loan. It’s possible to confirm an ID card to ensure that this is the right person.
Various AI-based apps allow modifying all the financial processes, making them more secure. Do you remember the rule? Security means customers’ trust and loyalty.
Benefit #4. Better Insurance Recommendations
One more aspect that AI improves is the insurance sector. A lot of insurance companies like Ageas have already integrated AI into their everyday tasks.
It’s possible to use Artificial Intelligence for large data volumes like real estate and motor transport. AI is used to assess the damage level after the car accident or to monitor the house condition.
AI is quite profitable for improving insurance services. Machine learning technology can replace human workers, doing the job faster.
Also, Artificial Intelligence helps consumers and insurers decrease the number of insurance claims. As a result, it’s possible to turn insurance into a preventive service.
Benefit #5. Improved Analysis of Investments
Hedge funds stand for private investment funds that work with wealthy professional investors. AI allows processing a vast amount of data and improves the quality of investment analysis.
Artificial Intelligence assists in creating hedge funds that perform all stock exchange operations without human intervention.
AI algorithms can predict market change, analyzing market prices, and other metrics.
As you can see, AI can be quite useful for the FinTech industry.
Promising FinTech AI-Based Startups
Let’s discover the details of AI startups in the FinTech industry that created great solutions.
- Aire: This company from London, the UK, focuses on credit scoring of borrowers with a poor credit history. Aire offers a user to fill in a questionnaire. The system asks questions like ‘What do you spend money for?’, ‘What is your main income source?’, and so on.
- Kabbage: Kabbage is a great company that focuses on lending. Kabbage’s headquarters is located in Atlanta, the USA. The service offers loans that users make online that are very convenient to users. The platform uses machine learning and Big Data analysis to analyze the risks of the investment.
- Kasisto: Kasisto has created an AI-based chatbot for the financial industry. The chatbot can respond to the voice questions of the client. Chatbots are perfect for FinTech since they allow reducing human mistakes. Chatbot knows everything about banking rules and issues. Kasisto has combined the AI and banking sectors, bringing a bunch of benefits to both parties.
To sum up, Artificial Intelligence can bring a lot of innovations and benefits to the financial industry. Of course, the main one is fraud prediction. In the case of the financial industry, customers want to ensure security issues.
You need to show your customers that all your financial services are secure and profitable. Artificial intelligence can change the way people interact with the banking industry. It improves all the aspects of FinTech services.