This year, artificial intelligence (AI) played a pivotal role in revolutionizing how businesses operate. It’s significantly transformed operations, strategies and customer interactions across industries.
Due to their ability to process vast amounts of data rapidly and accurately, AI applications are particularly well-suited to the financial services industry. Many banks and credit unions are using AI to improve investment analysis, enhance operational efficiency and more rapidly adapt to dynamic market conditions.
Below are the top eight ways businesses are using AI in financial services.
1. Investment Advice
Some financial services businesses have leveraged AI to build robo-advisors that deliver automated investment management services for clients. These tools can automatically create and manage investment portfolios based on inputted preferences, risk tolerance and financial goals.
2. Automated Trading
Some financial services firms use AI-powered algorithms to analyze market trends, news and historical data to make split-second trading decisions. These algorithms can execute trades autonomously, leveraging machine learning to optimize portfolio management.
3. Customer Service
AI-powered chatbots and virtual assistants can handle customer inquiries 24/7, providing support and answering questions about accounts and transactions. This helps streamline simple customer interactions so service agents can more quickly attend to issues that require their attention.
4. Credit Scoring and Loan Approval
AI models assess creditworthiness by analyzing various data points, potentially offering access to credit for individuals and businesses that may have been overlooked by traditional scoring methods.
5. Fraud Detection and Prevention
AI algorithms can process large quantities of transactional data in real time, finding patterns and anomalies. This helps banks and credit unions detect fraudulent activities faster and more accurately than traditional methods.
6. Risk Assessment
Banks and credit unions can use AI models to make lending risk evaluations more accurate. Risk assessment tools can evaluate numerous data sources to assess credit risk, determine insurance premiums and make underwriting decisions.
7. Market Analysis
Natural language processing (NLP) is a form of AI that can gauge market sentiment by analyzing news articles, social media and other text. This can help financial organizations make better-informed investment decisions.
8. Accounts Payable Automation
AI-powered accounts payable (AP) automation tools can help banks and credit unions more efficiently process invoices and deliver payments to vendors and suppliers. Additionally, these tools can create reports that help financial services businesses identify opportunities to cut costs and eliminate bottlenecks in internal financial processes.
For more information about how companies are using AP automation software to make positive impacts within their finance departments, check out our exclusive report, “The Ultimate Guide to AI in Finance.” In it, you’ll find expert analysis and real-world data on AI best practices from 500 finance executives.
