AI in Financial Services
- [The University of Chicago]
Be alone, that is the secret of invention; Be alone, that is when ideas are born.
-- Nikola Tesla
- AI in Personal Finance
Consumers are hungry for financial independence, and providing the ability to manage one's financial health is the driving force behind adoption of AI in personal finance. Whether offering 24/7 financial guidance via chatbots powered by natural language processing or personalizing insights for wealth management solutions, AI is a necessity for any financial institution looking to be a top player in the industry.
- AI in Consumer Finance
One of the most significant business cases for AI in finance is its ability to prevent fraud and cyberattacks. Consumers look for banks and other financial services that provide secure accounts, especially with online payment fraud losses expected to jump to $48 billion per year by 2023, according to Insider Intelligence. AI has the ability to analyze and single-out irregularities in patterns that would otherwise go unnoticed by humans.
- AI in Corporate Finance
AI is particularly helpful in corporate finance as it can better predict and assess loan risks. For companies looking to increase their value, AI technologies such as machine learning can help improve loan underwriting and reduce financial risk. AI can also lessen financial crime through advanced fraud detection and spot anomalous activity as company accountants, analysts, treasurers, and investors work toward long-term growth.
- Benefits of AI in Finance
AI in finance can be used for task automation, fraud detection, and delivering personalized recommendations. The benefits of implementing AI in finance - for task automation, fraud detection, and delivering personalized recommendations—are monumental. AI use cases in the front and middle office can transform the finance industry by:
- Enabling frictionless, 24/7 customer interactions
- Reducing the need for repetitive work
- Lowering false positives and human error
- Saving money
Automating middle-office tasks with AI has the potential to save North American banks $70 billion by 2025. Further, the aggregate potential cost savings for banks from AI applications is estimated at $447 billion by 2023, with the front and middle office accounting for $416 billion of that total.
