In the recent years, fintech or financial technology has rapidly evolved and increased the efficiency and service ability of the financial sector. A portmanteau of the words ‘financial technology,’ fintech refers to the novel technology employed in financial services. Owing to the rampant demand for fintech, more and more companies are jumping on the bandwagon to adopt artificial intelligence (AI) and machine learning (ML) technologies.
How are Artificial Intelligence and Machine Learning Relevant in Fintech?
Like all other technologies, fintech depends upon extensive big data analysis and other related tools for its progress and functioning. Some of the most prominent uses of artificial intelligence and machine learning in fintech are listed below:
1) Advanced Decision Making
A predominant part of fintech includes the various applications designed to enhance the decision-making process in monetary institutions such as insurance and investment firms or banks. AI and machine learning techniques actively contribute to data visualization and analysis, thus facilitating accurate decision-making.
2) Customer Experience Automation
AI virtual voice assistants and chatbots are changing the face of customer service. Fintech companies are taking to these AI-powered customer service bots to ensure a convenient and effortless experience for their clients.
3) Virtual Financial Assistants
AI and ML capabilities have been harnessed to develop virtual financial assistants. Through this, it is possible to help users make decisions regarding their financial goals and portfolios, as well as monitor stock and bond prices, and others.
Digitization of financial assets and services has led to a high risk of cybercrimes and frauds. This warrants the implementation of adequate cybersecurity measures. Through AI and ML online security, users can quickly access any activity related to their accounts/assets and keep track of suspicious activities.
5) Managing Assets
Investment firms actively make use of AI to generate algorithms for forecasting trends and patterns. With this, fintech companies are constantly embracing automated asset management tools such that any intermediaries are eliminated, and users can directly oversee and manage their account activity.
Providing loans through AI and ML technology significantly reduces operational downtime as well as the possibility of errors. Furthermore, through this medium, the candidate reviews and, by extension, the final decision will also be free from human bias.
7) Accurate Forecasting
Fintech applications can undertake exhaustive calculations and analyses to provide highly accurate insights about the financial performance of an asset in the future.
8) Increased Personalization
Fintech, through AI and ML tools, has completely revolutionized the financial services industry. As a result, this sector now has scope for the personalization of one’s finances through platforms such as smart wallets.
9) Client Risk Analysis
Artificial intelligence is also utilized for automation of the client selection process based on their risk profile. Delegating selection/review procedures to AI always has the added advantage of eliminating human bias.
This is the most vital application of machine learning in fintech. ML algorithms are deployed to undertake extensive data analysis for hedge funds and investment banks to facilitate trading.
Fintech as an industry has immense potential that is only increasing. Given this, it is also becoming the most sought-after area of study for graduates looking to enter the field. As a result, fintech certification programs and other related courses such as artificial intelligence courses and machine learning online courses are now in significant demand. When it comes to online education platforms, Hero Vired is an undisputed leader. In collaboration with the world’s leading universities, including the Massachusetts Institute of Technology (MIT) and Singularity University, Hero Vired brings you a range of competitive, industry-relevant courses. Start your journey with Hero Vired’s financial technology programs. To know more, visit their website today!