Published on May 28th, 2019 | by Emergent Enterprise0
How AI Technologies Help Banks and FinTech Startups
Financial companies are the perfect storm for artificial intelligence. They have massive amounts of data and many procedural forms that need accuracy and diligence. And did I mention 24/7 surveillance looking for fraud? Vik Bogdanov reports at readwrite.com how fintech is a leader in adopting AI and seeing some real, measurable results. The next time your bank alerts you of some suspicious activity on your account, thank AI.
Photo source: Getty Images
The financial industry was one of the first to adopt and enjoy the benefits of artificial intelligence (AI). The annual budgets of large banks amount to billions of dollars, which is comparable to the state budgets of some developing countries. No surprise that banks and financial organizations will be the key drivers of AI R&D in FinTech. They’ll also be the ones to bridge the AI knowledge gaps across other industries and support FinTech startups ecosystem.
The largest and most successful credit organizations have already developed official AI strategies.
Most of the strategies imply that internal or outsourced AI departments and teams be launched. According to the forecast of Autonomous Research, by 2030, AI technologies will allow banks to reduce operating costs by 22%. Savings of financial institutions can reach $1 trillion in the long run.
At the same time, an acute problem for large banks is the lack of qualified AI developers and data analytics specialists. The lack of devs can slow down the development of technology in many sectors, with FinTech being damaged the most.
The previous wave of FinTech startups and client applications in the field of financial services was associated with the proliferation of smartphones. At about the same time, the term “FinTech” itself appeared. Smartphones allowed FinTech projects and leading banks to take advantage of client location determination, encryption, digital signature, secure remote access, etc. As public and private cloud computing platforms emerged, work with financial data became streamlined and facilitated.
AI and FinTech: a Happy Marriage?
AI gave birth to a new wave of applications and services in the financial market. Since AI can handle unstructured information such as images, video, audio, location, and time series data perfectly well, there are already AI-based solutions able to detect fraud, assess creditworthiness and risks, identify a person based on his/her digital footprints, etc. In the insurance sector, they help identify insurance fraud, automate claims cases, and improve risk management.
By using AI-driven chatbots, banks can take their customer relationships and experiences to the next maturity level, as they help personalize UX in real-time and in the most efficient way ever.
Another AI product category that’s extremely popular among banks, and financial companies is a virtual assistant. Just like bots, they help walk the user through the bank’s services and products and, thus, improve the user journey, provide insights and set specific calls to action to increase goal conversions.
Let’s take a look at some of the most exciting AI initiatives launched by banks and financial organizations.
How Banks Leverage AI Technologies
JP Morgan: uses AI to automate the analysis of loan agreements. The bank recently introduced the Contract Intelligence platform (COiN) which allows users to analyze such agreements, highlight the key terms and conditions, as well as critical data. Previously, this work required 360 thousand man-hours to complete.
Wells Fargo: announced the creation of a special AI team that will be engaged in developing innovative payment technologies and improving services for its corporate clients. In particular, Wells Fargo’s AI team will work on creating technology that can help the bank provide more personalized online customer service.