Artificial intelligence has crept its way into many facets of life. This includes revolutionizing the finance industry. Companies are constantly working to keep up with the competition as new technology and methods are implemented. Here are three artificial intelligence trends that are currently dominating the finance industry.
- Detecting fraud
E-commerce has surged in recent years, and along with it comes an explosion of fraud. Dealing with online fraud is a challenging task because some strategies to prevent it can be too much and push potential buyers away. A study conducted by Javelin Strategy in 2015, a research firm, determined that rejected transactions and fake declines cost retailers $118 billion in losses, with some customers never returning due to the experience.
Artificial intelligence can improve this by using algorithms that aid in detecting fraudulent transactions without being too restrictive to cause an inconvenience to buyers. These algorithms focus on a behavior-based approach instead of applying the same rules to all consumers for more effective and accurate fraud prevention.
Chatbots have made customers able to speak with artificial intelligence to get answers to frequently asked questions or concerns. Machines learn how to speak more naturally to mimic an actual human. AI can aid in helping individuals manage their finances. Advanced formulas link to your bank account and analyze your spending habits with income to determine how much you can realistically afford to put up for a rainy day fund. These tools give users deeper insight into their overall financial picture. Digital assistants from large banks make transactions such as sending money to a friend as simple as asking the device.
- Algorithms for trades
Computers are phenomenal at examining and evaluating numbers. Trading stocks have become something artificial intelligence can accomplish due to programming that takes relevant factors into account. These systems examine trading patterns and create forecasts based on the numbers to make decisions regarding trading and managing hedge funds. These methods aren’t flawless, and it’s not possible to accurately predict the future, no matter how many numbers are crunched.
Artificial intelligence is relatively new and has plenty of room for advancement and improvement. There will definitely be social, economic, legal, and ethical issues that come up along the way, but things appear to be looking positive for the finance industry’s future.