Is it right to still refer to AI as a trend in fintech? Probably not, because AI has been powering fintech companies for over a decade. Furthermore, fintech companies will not let up on leveraging AI in fintech because the AI market for fintech, valued at an estimated $8 Billion, proves that this innovative technology will be around for a long time. Likewise, AI-driven innovative technology is the force driving the financial sector’s success, growth, and sustainability. To learn more about technology solutions, check AI in fintech article.
Are you interested in knowing how AI-based innovative technology is changing how fintech companies work? Do you want to know everything about AI applications in fintech? Then, this article is for you. This article will cover how AI-based fintech is changing the way fintech companies work with innovation and disruptive technologies.
Have you ever wondered why the financial sector stands out from other sectors? The answer isn’t farfetched. The financial sector stands out for its high degree of innovation, particularly with the adoption of AI in the fintech industry. Furthermore, AI for fintech is significantly changing the financial sector today, especially with the way AI applications are helping financial companies to overcome the usual difficulties they encounter while providing daily services.
Similarly, fintech companies are leveraging artificial intelligence for fintech to collect, analyze and manage data from multiple sources to provide valuable insights. Thus, solving financial problems, offering increased security to customers, making better decisions, and increasing the efficiency of financial companies, among others. Below, you will learn how fintech operations have evolved with AI.
Improved payment process
Artificial intelligence for fintech continues to find more use for digital payments in the financial services sector. For example, fintech companies can now enable biometrics-activated payments such that transactions proceed automatically without human intervention and without having to wait in a checkout line or use a POS system.
Furthermore, when transactions are to be made on an issuer’s behalf, fintech companies can create smooth payment processes by analyzing past transactions before approving or declining such transactions. It has also been predicted that AI will become so good at understanding consumer behaviour that a neural network is created that will intuitively know how customers want to spend their money even before they do.
Another aspect of financial services that has changed drastically with AI in fintech is wealth management, which involves making better investment decisions and management of people’s wealth portfolios. According to an estimate, it is expected that AI-powered wealth advisors will be managing more than $4 trillion in assets for consumers around the world. Moreover, some AI-powered wealth advisors can handle complex processes such as tax-loss harvesting and retirement planning even beyond basic wealth management. Thus, keeping customers on track to meet their financial goals.
Fintech and AI have proved helpful in automating customer support in two major ways, thus leading to improved customer service and relationship management. The first is AI-powered personalized banking apps. These apps make it possible for financial companies to advise customers so they can achieve their financial goals, and track income and expenses, among others.
Secondly, AI in fintech allows finance companies to use AI-powered chatbots to quickly answer customer questions and improve customers’ overall experience with their products and services. Furthermore, chatbots help reduce the workload placed on finance companies’ call centres, thus freeing up workers’ time to focus on more urgent and complicated matters, leading to a better banking experience.
AI for fintech allows finance companies and their customers to make better, more accurate, informed decisions. For example, customers can use data visualization tools to gain clearer pictures of their current situation and make wiser financial decisions. Similarly, finance companies can make better AI data-driven management decisions based on machines’ recommendations after data analysis instead of human experts.
Arguably, fraud is one of the biggest issues finance companies face today. However, increased security through fights against fraud and money laundering is one of the most important benefits of AI in the fintech industry. Through innovative AI tools and technologies, finance companies can now prevent fraud by analyzing data and training algorithms to help improve their ability to recognize fraudulent claims and activities and tackle them immediately.
Another innovative use of artificial intelligence in fintech is customer churn prediction. This involves using historical data by finance companies to gain insight into customer data. How does this insight help? First, finance companies can predict the potential preference shift of their loyal customers and address any issue of concern. Furthermore, it becomes easy for finance companies to make informed and data-driven decisions that will retain loyal customers and prevent them from turning to competitors.
Errors have serious repercussions and can cause irreparable reputational damage. As a result, financial services providers will go to any length to reduce the risk of errors in their daily operations, even reducing human interactions. Therefore, the adoption of AI applications in fintech through the use of AI-powered tools and techniques helps to achieve risk reduction and achieve increased accuracy.
Artificial intelligence in fintech enables finance companies to reduce the number of workers involved as AI-driven tools is used in place of humans. This leads to a reduction in operational costs, and the savings can be redirected to business development. However, financial companies must note that artificial intelligence cannot replace the value of a handshake.
If you have not been paying attention before, now you know AI applications in fintech are almost endless. This article has discussed how AI-based fintech is changing how fintech companies work. Therefore, we can deduce that AI in the fintech industry holds great promise in the coming decades and will continue to change the global market for the financial sector.
Perhaps you are asking what the next step should be, whether entering the fintech market or incorporating AI into your business. It is in your best interest and that of your business not to delay taking this bold step. We recommend checking out this article on the future of AI in financial services.