From algorithmic trading to self-service banking, AI is already taking the financial services sector by storm. Why? It can collate and analyze data inordinately faster than humans, making it easier for organizations to determine credit-worthiness and root out fraud.
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77% of executives expect AI to turn into an essential business driver for the industry by 2022.
AI provides faster, more accurate assessments at less cost. Plus, it takes more complex data into account, allowing lenders to distinguish between those of high default risk and those that are credit-worthy but with no history.
Risk management is the most common AI application in the industry. Its high processing power helps it analyze in real time and provide detailed forecasts that traditional data science methods are incapable of.
By analyzing customer behavior, location and buying habits, AI systems can spot fraud and trigger the appropriate security measures when a purchase seems out of the ordinary.
Algorithmic trading (sometimes called quantitative or high-frequency trading) involves AI monitoring structures and unstructured data to make more accurate stock performance predictions.
AI powers self-service banking and personal finance tracking through smart chatbots and easy-to-use applications. It creates a personalized experience that customers now demand.
Almost 40% of executives feel that regulatory hurdles impede AI implementation.
Besides increasing efficiency, AI has proven to be a possible revenue generating area as well. So why is mass adoption still a few years away? Many organizations cite data sharing regulations as well as unnecessary complexity and uncertainty when it comes to governance.
Ready to reap the rewards of AI? Insight has the expertise, capabilities and partnerships to help you optimize existing systems — or build from the ground up.
Barton, M., Ryll, L. and others. (January 2020). Transforming Paradigms: A Global AI in Finance Services Survey. World Economic Forum and Cambridge Centre for Alternative Finance.