In this blog, you are expected to get information about fintech and the use of AI in fintech. If you are looking for an opportunity in the fintech industry, you must scroll through the end. We are sure, it will be worth reading this content.
What Is Fintech?
The term itself explains its meaning, “Fintech” – the financial technology. The intervention of technology in the field of finance, replacing the traditional ways of processing banks and financial systems. PayPal and Ally are the international yet biggest examples of fintech.
What Is AI?
Artificial intelligence is the way technology processes the way humans can, but faster. With AI, problems could be solved more efficiently by using powerful processing units and smart programming.
There is a subset of AI called machine learning (ML), to enhance the processing of fintech by learning themselves as humans and many other technologies.
Use Of AI In Fintech
Let’s understand how AI and ML are affecting the way fintech works.
“In 2021, we expect AI to become even smarter, with more sophisticated chatbots and advanced functionalities – including switching utility and credit providers – as well as fraud prevention, becoming the norm. This will improve the accuracy and personalisation of financial services and enable individuals to better access personal finance products, ultimately improving people’s financial well-being and supporting those who are keen to stay on top of their finances during these uncertain times.”
1. Financial Process Automation
The very basic perhaps the most important transformation that the financial industry has got through the intervention of AI is the automation of repeated tasks. Creating customer portfolios, status reports, fetching financial insights, completing basic banking formalities, etc are no more done manually. The fintech industry has AI to perform such tasks more efficiently.
Now the financial officials can focus on more productive tasks of their jobs by relying on AI automation and machine learning for other necessary yet repeated work.
2. Optical Character Recognition
There is a technology called OCR (Optical Character Recognition) which is used to recognise the text from the images. It is helping the fintech by converting the image text into the format computers can process the data. This way, it processes a thousand times more documents than a human surveyor or an accountant.
Then, this process gets combined with Natural Language Processing (NLP) which intends to teach machines to identify speech and writing patterns. Using NLP, computers can look for inconsistencies in contracts and other documents that could be fake. This way, many frauds could be prevented.
3. Fraud Prevention
Now banks can check for money laundering much more conveniently than before with anti-money laundering laws. Moreover, the AI-backed technology could allow financial institutions to have a higher level of compliance.
Criminal organisations have been hiding their illegally earned money sources for a long time. Now, with more powerful AML laws & compliances and advanced AI, financial systems have the ways they can crawl through the big data, identifying different patterns and observing suspicious movements.
4. Financial Advice And Health
Previously financial health advisors used to come to your home to analyse your incomes, expenses and saving goals. Now, some apps do the same for the users.
Banks and other financial institutes that provide health advice uses machine learning and AI to understand monthly income & expenses, and the saving goals and present them to the user over the internet in an understandable manner for people who may not get the technical jargon.
Furthers, these insights are used to make more reliable and calculative financial health advice for the end-users. Financial advisors can use such data to boost their sales at a faster pace.
5. Know Your Customer (KYC)
Now people can open their bank accounts just in minutes while sitting online. The biggest role is processed by the KYC. It is being used to identify customer identity automatically with more security. Customers upload their photos and one of the identity proof on the portal. The AI technology, optical character recognition then scan the photos and the ID proof to check whether they match or not.
If it would have done manually, there could be possibilities of mistakes.
6. Transaction Search
If you notice we have been given a transaction ID every time we transact. We can use this ID to raise a dispute and ask a query from the bank officials.
It was never too easy to check a particular transaction before the introduction of AI in the fintech industry. Computers can search through the millions of transactions with this identifying code. With transaction ID, one can check the details such as when, where and to whom the transaction has been made. This has made financial processing easier and faster.
Conclusion
Artificial learning in finance has made remarkable changes making financial services to fintech services. One can expect to automate repeated tasks so that professionals can focus on more valuable tasks. Moreover, OCR and machine learning is helping the fintech industry in performing many jobs and easing the life of financial experts. It has become easier to check transaction details even on your own with the help of faster computer processing and data management. Additionally, professionals can use the insights fetched by AI and ML to better analyse the client profile and give financial advice. Stay updated with our blog to know more about fintech and AI.