According to The Business Research Company, with a compound annual growth rate (CAGR) of 26.8%, the global AI in fintech market size increased from $9.15 billion in 2022 to $11.59 billion in 2023. Besides, the market is also expected to continue increasing at a CAGR of 28.6% to $31.71 billion in 2027.
A McKinsey’s research indicated that 56% of companies utilized AI in at least one business function. Apart from that, another survey from KPMG showed that 37% of financial service business leaders said AI adoption is happening too quickly, while 55% said it is moving at the right pace. In addition, 85% of respondents said they wished their company would use AI technology more aggressively.
Accordingly, it can be seen that AI applications are widely and increasingly used in the fintech industry. In this blog post, let’s delve into the details of AI applications in this sector, and look at these common use cases with examples.
Fraud Detection
Artificial intelligence (AI) and machine learning can support organizations in detecting fraudulent activities. AI provides algorithmic analysis of large sets of data collected from disparate sources. By processing mass amounts of information, AI can identify anomalies in historical trends such as payment information, customer profiles or detection of suspicious entities. AI technology can also detect patterns that suggest fraud, such as unusual volumes or velocity of transaction volume or suspicious actions tied to a single entity. Some advanced AI models are even capable of proactively flagging fraud before it occurs, which enables organizations to deploy countermeasures more effectively and reduce economic losses associated with fraud.
One example for this sector is Vectra’s Cognito, also known as Vectra Threat Detection and Response Platform. Vectra’s cutting-edge technology is revolutionizing the fight against cyber threats. Its advanced software boasts automated threat detection capabilities, enabling the rapid detection of covert attackers, particularly those targeting financial institutions. With Vectra, event investigations are markedly expedited, and even compromised data can be easily identified. In short, Vectra’s Cognito is a game-changer in the ongoing battle against cybercrime.
Data Analytics
Artificial Intelligence is also increasingly being leveraged in the financial industry to analyze data quickly and accurately. With access to vast amounts of ever-changing data, AI is capable of processing a significantly higher volume than humans are able to. It can be used to identify stock trends, manage investments, and detect investment opportunities in order to optimize portfolios and enhance decision making. Furthermore, AI technology can not only make forecasts based on big datasets but also reduce risks associated with conducting business operations. This allows financial firms to gain an edge in the rapidly advancing market by making more precise predictions which can prove to be invaluable information for traders.
Perfios is a perfect example for this type of use case. Perfios has crafted an innovative financial data analysis platform that can seamlessly manage data from a diverse range of sources, empowered with the ability to extract, curate, cleanse, and analyze information. This exceptional technology has paved the way for the creation of specialized and domain-centric solutions, delivering advanced and detailed insights.
Cost Management
AI offers companies the potential to save on costs because it can operate more efficiently than most manual methods. AI can streamline processes by performing high volumes of data entry in a fraction of the time and cost it would take to hire and manage employees for these roles. Additionally, AI can aid with automated decision-making which not only saves money but boosts operational efficiency as well. Machines equipped with this technology can help companies identify service issues faster, allowing them to mitigate problems before costly delays occur. By utilizing the power of AI in various areas of their organization, businesses are able to reduce ongoing costs and facilitate growth without sacrificing quality.
Suplari for Finance can me mentioned as a prominent example in this sector thanks to its outstanding features including:
+ Ability to reduce budgetary surprises and boost forecasting accuracy.
+ Find hidden dollars for the investment by improving cash flow.
+ Determine, predict, and reduce risks.
hulu, CDK Global, and SONOS are some of the major clients of Suplari.
Customer Experience
In today’s financial industry, companies are faced with the challenge of providing personalized services to millions of clients. Thanks to AI-powered technology, this task has become more manageable. By analyzing customer data collected through banking apps, businesses can offer tailored products and financial advice to boost client loyalty and trust. Such apps also offer handy features that help users stay on top of their finances, such as tracking spending goals and sticking to financial objectives.
The future of client experiences is looking brighter and more personalized than ever before, thanks to the innate learning capacity of AI systems. These intelligent models have the remarkable ability to identify speech patterns and nuances, effectively extracting meaningful insights from what might otherwise seem like aimless chatter. By analyzing the transcripts generated by AI, companies can anticipate their customers’ moods and needs with impressive accuracy, providing agents with the guidance they need to offer viable solutions. As AI continues to hone its skills in the art of customer service, we can expect a whole new level of tailored experiences to emerge.
KAI, a conversional AI platform, created by Kasisto, the pinnacle of Digital Experience platforms, was innovatively crafted to master the intricate language of the ever-changing banking and finance industry. KAI boldly hosts a myriad of humanizing experiences, while effortlessly granting access to enhanced customer engagement. Whether it be an uncomplicated retail transaction or the multifaceted demands of a corporate bank or wealth management firm, KAI is primed and empowered to take on the challenge. With KAI, you hold the might to revolutionize customer communications into profound, impactful interactions.
Final Thoughts
It’s clear that AI offers a wide range of benefits for the financial industry, from cost management to customer experience. Companies can use AI-powered tools and platforms like Suplari for Finance and KAI to streamline processes, reduce costs, improve forecasting accuracy and offer personalized services to customers. As AI continues to become more advanced, we will likely see even more innovative applications in the financial sector. With this technology on our side, businesses have an opportunity to create better experiences while maintaining their competitive edge in the market. Ultimately, leveraging artificial intelligence is key if you want your business operations to remain up-to-date with current trends and developments in finance.
