Artificial Intelligence has made huge strides in terms of popularity over the course of just a couple of years.
They pretty much aren’t a sector where it wouldn’t be relevant, but there are some that amplify their efficiency to next-level proportions through the implementation of the technology.
One of those sectors is Finance and everything that has to do with it. Banking, trading, analysis, lending and etc are the centrepieces which are used to build the AI-based financial future that most companies covet.
However, this overview of saying how great the technology is isn’t enough to feel the overall scale of the new trend, therefore we need to look at the part of the financial sector that AI manages to overhaul and turn into a thing of the future.
Banking, trading, analysis, lending and etc are the centrepieces which are used to build the AI-based financial future that most companies covet.
One of the primary benefits that AI has introduced for banks and several financial service providers is an affordable business model. This means that the hundreds of employees that were required to process the tens of thousands of transactions and contracts in the past, which would take days, have now been replaced with just one single software that can do it within seconds.
Anybody can understand why this is so affordable in the long run. All of the funds that were supposed to be spent on employee salaries, insurance, real-estate for the offices and other benefits can now be directed towards a more socially-beneficial project, for example, the betterment of the environment or the battle with poverty.
It could seem like hypocrisy to battle poverty by replacing jobs with technology, but in the long run, it paints a much better picture.
Thanks to the “newly saved wealth” from financial institutions, new projects don’t stay a thing of imagination, they finally get the opportunity to become reality and employe citizens.
One of the primary examples is the region where poverty is the most rampant, Africa. Banks and financial institutions there provide around 3-4% of overall employment rate, which is definitely something that can be risked in the short term if it facilitates a better long term.
Accurate market analysis
AI is also very helpful when an accurate market analysis is needed to be done within the day and most of it is located on various websites online.
If the analysis were to be done by a human, it would take at least a couple of hours for them to find, categorise and analyse all of the information available, but with the help of AI, the process becomes much faster and easier.
One such example is AI used by financial investment firms, which is designed to gather information and calculate market sentiment based on Tweets from influencers and the responses.
This is actually the technology that several cryptocurrency companies use. It has gotten very popular over the course of 2018 and 2019. Based on the fact that the market is slightly down or is not experiencing major volatility issues, AI sentiment analysis and bots are a great resource to provide your customers with.
Examples of these resources are crypto trading bots, on a more specific level, we can imagine something like the Bitcoin Trader reviewed by InsideBitcoins, on a more detailed level.
According to the review itself, the bots have an in-built algorithm which is designed to have an around 90-95% chance to place a successful trade, even if it is a net profit of just 1 USD.
The AI calculates the market sentiment on Twitter and various other social media platforms, it then pairs it up with chart analysis and general direction the market is posed to go towards and makes the safest trade. Although this doesn’t generate a lot of income for the users, it at least allows them to generate something while they’re not even touching it and are working on their own projects or jobs elsewhere.
Chatbots and education
Another innovation that most people have already encountered with banks is the AI chatbots which are designed to provide services to as many customers as possible at the same time.
In the past, it was common to wait half an hour in line and spend over an hour with the consultant to finally get the answer you were seeking.
However, with the implementation of chatbots on most banks’ social media channels, customers are able to resolve most of their issues that have to do with basic banking functions within minutes or even seconds.
Pairing these chatbots to the convenience of online banking is what will create the financial literacy that every country is trying to target in the long run.
When will AI take over?
As of right now, there are thousands of AI companies vying for dominance in the new market.
Naturally, as we all know, in the world of Fintech, the presence of competition is one of the best things that can happen.
Based on the fact that AI has to be chosen based on quality and not quantity, it forces developers to walk a narrow road of production, which only focuses on efficiency and speed for the customers.
Adding that dab of competition introduces a whole new level of AI integration, where developers focus on not only being a tech provider but the best tech provider out there.
It’s quite realistic to have nearly all commercial and state banks switch to AI-based databases, analysis and customer support systems by 2030. All we have to do is be prepared for that change to become a part of it.