AI is an important technology for shaping the future of the world. It effects different industrial sectors and is seen as a high potential driver for increasing productivity and profitability. On such sector is the financial services where financial institutions, including banks and fintechs, are leveraging AI to revolutionize their business model and interactions with their customer base. That is why fintech software development services are in high demand where different financial institutions hire vendors to deliver customized solutions in accordance to their requirements. There are different use cases of AI in financial services which illustrate the benefits of the technology.
AI chatbots
AI chatbots have made high quality and 24/7 customer support a reality. Customers of financial institutions can have dynamic conversations with chatbots which are smart enough to adapt their responses according to the queries. This development has addressed a common complaint about chatbots which highlighted that the pre-stored responses of the past were too limited in their scope. These chatbots can also serve wealth management advisors for customers where updates regarding policy changes, investment opportunities and global events are provided to guide the future course of action in terms of financial decisions.
AI fraud prevention
AI is a valuable tool in detecting and preventing financial frauds. The technology has made it possible to raise red flags for different transactions patterns which may indicate attempts at financial crimes like money laundering and tax evasion. At the same time, it is equally proficient in detecting fraudulent one-off transactions which is a common practice with online credit card payments. The AI fraud detection systems can evaluate the details of the transaction before processing it so that the risks of financial irregularities can be mitigated.
AI loan underwriting
Loans are among the primary sources of revenue for various financial institutions. The process of risk evaluation in terms of loan default is time consuming and often difficult to predict accurately. AI, along with machine learning, serves as an incredibly useful tool for loan underwriting. AI based underwriting is capable of factoring in large amounts of decision variables to reach an accurate assessment of the risk. This facility not only means that bad loans are minimized but it also uncovers different eligible customers with low default risk which may have been overlooked in the manual process. Thus, the losses are minimized while profits are increased which creates a two-fold positive impact on the bottom line of financial institutions which offer loans.
AI mobile banking and the future of financial institutions
The younger generations who grew up with smartphones are now becoming a part of the financial system as both employees and entrepreneurs. Their preference for mobile banking channels over traditional banking channels has led to a paradigm shift in financial industry. The modern consumer behavior is such that they want the transaction process to be as simple and intuitive as possible. AI ensures that these new age customers can get the desired response for their request with the least number of taps. Moving forward, the role of AI in financial institutions would only expand to encapsulate greater number of services offered to the customers.
