ARTIFICIAL intelligence (A) has revolutionized various industries, exceeding our expectations and penetrating almost all sectors and activities.
In the near future, AI assistants will handle the tedious tasks that bog you down, financial decisions will be custom-made for your situation, and fraudsters will be outwitted by ever-learning algorithms. This isn’t science fiction; it’s the exciting reality of AI in FinTech. Let’s dive into how AI is transforming financial technology, and why you should be excited, not scared, about its potential.
AI-powered tools within fintech
By embracing AI, fintech can create a more efficient, inclusive and empowering financial future for everyone. CONTRIBUTED PHOTO
There are currently several AI-powered tools available in the market and some, such as chatbots, are widely used. Right now, these tools are providing customer services, monitoring activities, and providing data analytics insights:
Chatbots and virtual assistants. These tools provide customer service 24/7, handling queries, processing transactions, and offering personalized advice.
Fraud detection systems. AI algorithms analyze patterns and detect unusual activities in real time, reducing the risk of fraud.
Robo-advisors. These platforms use AI to provide financial advice and manage investments, making wealth management accessible to a broader audience.
Credit scoring. AI analyzes various data sources to assess creditworthiness, enabling more inclusive and accurate lending decisions.
Future expectations
Advanced predictive analytics. AI will enhance the ability to predict market trends and customer behaviors, leading to more proactive and personalized financial services.
Automated compliance. AI will streamline compliance processes by automatically monitoring and ensuring adherence to regulatory requirements.
Enhanced customer personalization. AI will provide even deeper insights into customer needs and preferences, offering highly customized financial products and services.
Blockchain integration. AI combined with blockchain will ensure more secure, transparent and efficient transactions.
We shouldn’t fear AI
Just like the internet-induced fear people experienced a few years ago, the fear of AI is just a natural response of humans to the unknown. It often stems from misconceptions about its capabilities and intentions.
There was a very popular tweet circling around the internet saying, “I want AI to do my laundry and dishes so that I can do art and writing, not for AI to do my art and writing so that I can do my laundry and dishes.” And that is, in fact, very spot-on on what we should leverage this new technology into.
The fear surrounding AI often involves job displacement. However, AI should be seen as a collaborator, not a competitor. By automating mundane tasks, AI frees up human potential for higher-level thinking and creativity. Humans will continue to play a vital role in areas like strategy, relationship management, and overseeing ethical AI implementation.
Embracing AI can lead to:
Increased productivity. AI handles repetitive tasks efficiently, freeing up human workers for strategic activities. Better decision-making. AI analyzes vast amounts of data quickly and accurately, providing valuable insights for informed decision-making.
Enhanced customer experience. AI offers personalized and responsive customer service, improving satisfaction and loyalty.
Innovation and growth. By automating routine tasks, AI creates opportunities for innovation and business expansion.
Optimizing operations with AI
For financial institutions, there are many uses for AI that will help boost efficiency and optimize overall operations, such as data analytics, where AI-powered tools can process large volumes of data quickly, identifying trends and insights that can drive strategic decisions. Financial institutions can use these insights for market analysis, customer segmentation and risk management.
Other innovative uses include credit scoring, as AI enhances credit scoring by analyzing a wide range of data sources, including non-traditional ones like social media behavior and mobile phone usage. This results in more accurate and inclusive credit assessments, expanding access to credit for underserved populations.
AI can also be implemented within customer service and fraud detection. As previously mentioned in this article, AI chatbots and virtual assistants provide instant, round-the-clock customer support, handling common queries and issues efficiently. This not only improves customer satisfaction but also reduces the workload on human customer service representatives.
When it comes to fraud detection, AI systems continuously monitor transactions for unusual patterns, detecting and preventing fraudulent activities in real time. This proactive approach reduces financial losses and enhances security.
Boosting financial inclusion
Emerging technologies within FinTech have been taking over the world in recent years, with various innovative solutions easily accessible to anyone with a smartphone. Solutions such as blockchain technology offer secure and transparent transactions, reducing the need for intermediaries and lowering transaction costs. This is particularly beneficial for cross-border payments and remittances, making financial services more accessible to underserved populations.
Mobile banking applications provide financial services to people in remote and rural areas who may not have access to traditional bank branches. This increases financial inclusion and empowers individuals to manage their finances more effectively. Furthermore, peer-to-peer (P2P) lending platforms connect borrowers directly with lenders, bypassing traditional financial institutions. This model provides more people with access to credit, especially those who may not qualify for conventional loans.
In addition, biometric technologies, such as fingerprint and facial recognition, enhance security and ease of access to financial services. These technologies can help reduce fraud and ensure that financial services are accessible to everyone, including those without traditional identification documents.
By embracing AI, FinTech can create a more efficient, inclusive and empowering financial future for everyone. AI is not a threat, but a powerful tool waiting to be harnessed. Let’s work together to build a future where AI strengthens our financial well-being and unlocks a world of financial opportunities for all.
Baasandorj D. is the chief business development officer at AND Global, a leading fintech company that has created multiple cutting-edge companies to promote financial inclusion and technological capabilities across Southeast Asia.
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