<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/07/July-Blog-Banner-V3_1_Main-Banner.webp" alt="M2P Fintech" title="" width="100%" height="253">Artificial Intelligence (AI) has transformed the physics of financial services. It has altered centers of gravity, isolated vulnerable bonds, and changed traits that are imperative to building a successful business. The ability to leverage data to drive process and talent optimization, product performance, and personalized interactions is now considered critical to driving value and efficiency.By combining technology and robust data, AI delivers insight-driven decisions to resolve challenges. Financial services companies are becoming future-ready by harnessing the power of AI and Machine Learning (ML) to enhance operational efficiency, mitigate risk exposure, and customize product development, distribution, and customer experience.<blockquote class="block-node" id="ll5niu0xi">According to PWC reports, AI will boost global GDP up to $15.7 trillion by 2030 and 45% of total economic gains will arise from AI-driven product enhancements that stimulate consumer demand.</blockquote><h2 class="heading-node" id="fec6" style="text-align: justify">Growth Potential of AI in Finance</h2>Artificial Intelligence in the global financial technology market is expected to grow at <a class="link" href="https://www.prnewswire.com/news-releases/ai-in-fintech-global-market-to-reach-24-17-billion-by-2026--301615420.html">27.6% CAGR and reach $24.17 billion in 2026</a>. The growth projection is attributed to its ability to increase security and efficiency, personalize customer experience, automate services, and unlock several other growth opportunities.91% of financial services companies reported driving critical business outcomes by leveraging AI investments (Source: <a class="link" href="https://www.nvidia.com/content/dam/en-zz/Solutions/industries/finance/ai-financial-services-report-2022/fsi-survey-report-2022-web-1.pdf">Nvidia Report</a>). Here are the benefits they realized.<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/07/July-Blog-Banner-V3_1_Benefits-of-AI-Chart.webp" alt="M2P Fintech" title="" width="100%" height="253">AI-led data analysis and reporting surpass human intelligence to cut costs, accelerate revenue, and optimize service quality and product efficiency. It creates operational efficiency, predicts customer preference, detects fraud, and plans market expansions. Although some industry voices expect AI to replace 9% of all jobs by 2030, fintech companies are optimistic that AI will expand their workforce by 19%.<h2 class="heading-node" id="21fd" style="text-align: justify">How AI Transforms Banking &amp; Fintech</h2>Millennial and Gen Z customers prefer newer and faster technology over traditional systems. AI-based products and services enable FIs to meet the demands of today’s digital-age customers. It helps them enhance user experience through customized products and services.Listed below are sample AI-enabled services that global banks use to enhance customer experience.· Smile-to-pay facial scanning to initiate transaction· Micro-expression analysis with virtual loan officers· Conversational bots for basic servicing requests· Humanoid robots in branches to serve customers· <a class="link" href="https://m2pfintech.com/blog/5-reasons-why-banks-need-behavioral-biometrics/">Biometrics </a>to authenticate and authorize· Machine vision and natural language processing to scan and process documents· Machine learning to identify risk patterns and cybersecurity incidents· Real-time transaction analysis for risk monitoringAI technologies augment the overall customer experience by offering personalized recommendations, insights, and suggestions. In short, AI powers banks, insurers, asset managers, and fintechs to outperform peers, boost customer lifetime value, and increase market share.<h2 class="heading-node" id="fb07" style="text-align: justify">Top 6 Use Cases of AI in Fintech and Banking</h2>Over 75% of businesses use high-performance computing (HPC), machine learning, and deep learning for AI applications. While retail banking and capital markets benefit from deep learning, fintech firms rely on machine learning for the use cases below.<ol class="list-node" id="mglp0g4e6"><li>Transaction Fraud Detection</li><li>Conversational Chatbots</li><li>Robo-Advisors — Portfolio Optimization</li><li>Regulatory Intelligence</li><li>Credit Decisioning</li><li>Algorithmic Trading</li></ol>Transaction fraud detectionFinancial firms leverage AI and ML to identify, investigate, and mitigate transaction fraud, <a class="link" href="https://m2pfintech.com/blog/how-to-combat-money-laundering-2/">money laundering</a>, and <a class="link" href="https://m2pfintech.com/blog/crack-the-kyc-jigsaw-ease-onboarding-compliance/">KYC</a> discrepancies efficiently. Analyzing large datasets and user behavior, AI can decode risk factors and help reduce chargebacks, fake accounts, spam, account takeovers, and any other <a class="link" href="https://m2pfintech.com/blog/prevent-cnp-frauds-with-pci-3ds/">CNP</a> frauds in real-time. The fraud detection use case is critical in banking, card transactions, insurance, and lending platforms, to name a few.Conversational chatbotsChatbots and virtual agents fall under the conversational AI use case. They are quite different from conventional chatbots. By leveraging Natural Language Processing (NLP) and Machine Learning (ML) processes, they can understand customer intent, troubleshoot issues, and make small talk based on context. In financial companies, they can be used to collect customer information, deliver support, resolve queries, and redirect escalations to customer service representatives. These chatbots can be used across multiple channels and can deliver support via audio, video, and text.Robo-advisors — portfolio optimizationBuilding a strong financial portfolio is critical to maximizing returns on investments. Optimizing the portfolio helps balance the risk-to-reward ratio. AI-enabled Robo-advisors use predictive analysis to foresee future returns by analyzing the trends in the financial market. Investment companies can use this feature to make data-driven decisions that increase sales, optimize resource utilization, and improve operational capabilities. Robo-advisors are less priced options than conventional financial advisors. Even novices can drive value from investments with the help of Robo-advisors.Regulatory intelligenceThe banking and fintech sector must constantly update operations to stay compliant with governments and regulators. Using AI-led automation, compliance obligations are simplified, streamlined, and automated. The personalized, role-based dashboards provide regulatory intelligence for data-driven decisions at a lesser cost and time. Finance companies can stay up to date on compliance status and keep abreast with the latest regulations.Credit decisioning engineAI-based credit scoring can help expedite the assessment of creditworthiness and lending decisions. AI-led credit scoring models analyze real-time indicators such as current income, employment opportunities, and potential ability to earn, in addition to credit history, transaction patterns, work experience, and online behavior. This enables a sensitized and customized credit score assessment and inclusive lending decisions.Algorithmic tradingTrading is all about making profitable transaction decisions. AI-driven algorithmic trading uses pre-trade analytics and trading strategies to make lucrative transactions and groom efficient traders. Assimilating its own data using machine learning methods, AI-based algorithmic trading delivers real-time forecasts based on the analysis of price change patterns, currency values, global indices, raw materials, and other macro/micro indicators. It is super accurate in detecting market anomalies and helps reduce operational and trading risks.Now, these are not all. Apart from the use cases discussed above, AI can also help automate and expedite <a class="link" href="https://m2pfintech.com/blog/steps-in-credit-underwriting-why-using-an-alternative-source-of-data-and-behavior-metrics-will-be-of-help/">underwriting</a>, customer acquisition, and marketing optimization.To know more about the use of AI in banking and fintech, write to us at&nbsp;<a class="link au nr" href="mailto:business@m2pfintech.com" target="_blank" rel="noopener ugc nofollow">business@m2pfintech.com</a><a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

How is AI Changing the Financial Industry? Top 6 Use Cases in Fintech and Banking

<img src="https://m2p-website-file.s3.ap-south-1.amazonaws.com/m2p-website-file/marketing-cms/m2p-blog/2022/06/Bring-to-me-Blog_31May21-2.webp" alt="M2P Fintech" title="" width="100%" height="358">Brian was a kid who loved bedtime stories, and every day his mother picked a new book for his bedtime story. One day, his mother read him the Japanese folktale “The Magic Mortar.” In this folktale, the magic mortar gave whatever its owner wished for until he says stop. Brian was mighty impressed and wanted one for him. The very next day, he saw his mother ordering groceries from an app, and he wanted to know how it works. When explained, Brian exclaimed that the app is the magic mortar he was looking for.Pretty interesting, isn’t it?Little did we realize that we all have a magical tool in our pockets to make our lives easier. We can enjoy the comfort of our home and make everything reach our front door.Yes, you are thinking it right. It is called — ‘Bring it to me’ or simply ‘to Me’ economy.<h2 class="heading-node" id="7a46" style="text-align: justify">So, what exactly is the ‘Bring it to me’ economy?</h2>The products and services are right at your doorstep instead of you getting in your car and going to the store every time. Starting right from fertilizers for your garden to vegetables for sumptuous cooking, you get every item online.Furthermore, ‘time’ has become a valuable currency and today’s customers are willing to bear the cost if it reduces their workload. Also, businesses have started realizing that they need to go a step beyond the digital realm to retain customers. So, front door delivery options have become the new normal.<h2 class="heading-node" id="836f" style="text-align: justify">The Role of Technology</h2>On the other hand, silently, our economy is moving ahead with a plethora of advancements and innovations. Technology is the leading player that drives the rapid economic growth of every country, including ours. With the cool trends springing up every day, shoppers expect more like same-day delivery and technology inclusion into their lifestyle.(i) Financial TechnologyFintech’s biggest contribution to this evolution is the digital money transfer services, as economic growth is highly connected with <a class="link" href="https://m2pfintech.com/blog/fintech-a-catalyst-for-financial-inclusion/">financial inclusion.</a> Digital wallets were a huge hit to pull many customers to ‘bring it to me’ economy lifestyle. They are widely accepted right from a street vendor to huge shopping centers, which make their transactions quicker. Mobile payment apps and gateways help in hassle-free and secure money flow during transactions. They also assist in tracking and analyzing the customer’s spending habits and preferences to bring matching products and advertisements.<a class="link" href="https://m2pfintech.com/blog/bnpl-the-rising-fintech-star/">BNPL (Buy Now Pay Later)</a> gives the customer the comfort of purchasing their desired products anytime with the ‘pay later’ option. Even Fintechs can now customize loans and insurance for the assistants helping in delivery service. Thus, fintechs helps businesses in building a friendly and personalized approach to the customers.(ii) Artificial Intelligence &amp; Machine Learning TechnologyMany grocers and FMCG companies have started incorporating AI &amp; ML technologies to capture their target segment. The virtual fitting room is the buzz during this pandemic. A customer can virtually try on clothes, accessories, shoes, or watches and check if it fits them in a 360-degree view. Even the shoppers can visualize a 3D furniture model to check if it fits their environment and space before making an order. So, there is a virtual solution to everything using artificial intelligence and augmented reality technologies in today’s digital world.Delivery models like Autonomous ground vehicles (AGVs) with lockers, droids, and drones are state-of-the-art in the regular delivery service with their super-fast and reliable features. AGVs with lockers boost the delivery system even on Sundays and late nights, where human effort is least expected. On the other hand, drones will help in reaching the product (up to 15kg) in the rural areas at a relatively high average speed. Droids are small autonomous vehicles that relatively travel slowly on the sidewalks for doorstep delivery. With these innovations, we are on the way to reduce human intervention in delivery systems.(iii) Blockchain TechnologyBlockchain technology guards the customers’ information involved in the process and avoids any digital breaches and other cyber-attacks due to its centralized nature. It builds the customers’ trust in their privacy and the security of digital assets. It also increases sales and streamlines payment processing with high efficiency.<h2 class="heading-node" id="22e8" style="text-align: justify">What awaits us in the future?</h2>The ‘Bring it to me’ economy has gained its popularity by bringing services home. Be it personal grooming or professional cleaning, or any other service; the customers are ready to avail them.Nowadays, people are redefining their satisfaction based on memorable experiences and interactions. Businesses need to put their heart and soul into providing their best customer experience to reinforce and market their brand digitally.Be it a simple emoji that brings a smile or the level of service offered, businesses are now in a race against themselves to turn their products and customers as their brand ambassadors because the end is not the supermarket shelves but the customer’s doorstep.<a class="link" href="https://m2pfintech.com/newsletter/">Subscribe</a>&nbsp;to our newsletter and get the latest fintech news, views, and insights, directly to your inbox.Follow us on&nbsp;<a class="link" href="https://www.linkedin.com/company/m2pfintech/mycompany/">LinkedIn</a>&nbsp;and&nbsp;<a class="link" href="https://twitter.com/m2pfintech">Twitter</a>&nbsp;for insightful fintech tales curated for curious minds like you.

Tag: "Artificial Intelligence Ai (11)"

Product

About

Compliance

Resources