Use of Artificial Intelligence in Finance Industry
Banks and FIs are challenged by legacy systems and archaic processes. Most financial institutions use logistical regression to compute scores and can handle about 30-50 variables at best, resulting in a lack of comprehensive data for risk assessment.
Newer algorithms can multivariate, with the ability to mine, structure, weigh, and use rich data. In this era of digitalization our generation is facing clashes between their digital expectations & old traditions. Traditional banking has evolved itself from branch model to digital model. But there are still some things to be taken care of for easier banking ways. This gap can be concealed with the use of Artificial Intelligence.
By 2030 according to futurism, AI is going to be smarter to make our lives easier and it will only continue to improve itself. As per the concept of futurism, you are not just looking at what’s going to happen in the future, you have to also look at analogies for what might happen based on what’s happened in the past. With keeping futurist’s opinion in mind in terms of Banking and Finance, AI is going to change your behaviour and not the basis of banking. Three core products that financial service players provide are ability to store value, ability to move money & ability to access credit. With the help of AI these services are going to be improvised & only the behaviour of these products is expected to change for the betterment of utility.
Currently Fin-Techs over the world are emerging at exponential rate and rather than focusing on new financial core products they are giving extra attention on behavioural change. Financial service providers are intensifying current processes and looking forward to change behaviour of investors so that one can save more. The thought process behind this is that when one changes the way to save, one might invest more. Spotlight is on behavioural framework around the value store and not on the product frame work.
In the coming years technology is going to change the nature of banking itself.
This is leading us away from the conventional financial products and closer to understanding the technological experiences that service the utility, the core ability to move money, store value or access credit. New financial services are not based on interacting with the advisor or branch model but on starting from scratch & thinking how the utility of a financial services organization is best serviced to a customer in the real-time world & is at the core of this transformation. That’s the big channel to survive until 2030.