How is Artificial Intelligence Transforming Finance?
According to a recent report from Accenture Consulting, entitled Banking Technology Vision 2017, up to 79 percent of bankers agree that AI will drastically change the ways they will receive data about customers, as well as how they will engage with those customers. Put more simply, they believe that artificial intelligence will soon be at the center of all of their financial services.
Here are just a few of the ways that AI is improving the financial industry:
Better Customer Service:
Many basic customer interactions will take place through automated bot systems in the future. It will be simple to use such a bot on a service like Facebook Messenger or a bank’s website to quickly inquire about your mortgage options, account balances, or other banking services.
As the technology improves, chances are that these bots will replace many traditional human customer service agents, and those who call in to speak with someone will not necessarily even realize they are conversing with a robot rather than a human.
According to the report mentioned above from Accenture, 76 percent of bankers believe that by the year 2020, most financial institutions will have an AI interface as their primary point of engagement with customers.
For high-end clients, there will probably still be personalized services offered by human bankers, but for everyday interactions, bots will likely perform the necessary customer service tasks.
More Reliable Investment Services with Robot Advisors:
Even now, asset management companies are beginning to introduce robot advisors that can offer financial advice and portfolio management services with little or no human intervention. This technology means that fewer human errors are being made and transaction fees are lower.
These kinds of tools also allow users to create individual, personalized settings for their preferences regarding risk management and investment styles.
The pioneers for robot advisors in finance are Betterment, LLC, and Wealthfront, Inc., both of which offer tailored online services in the U.S. that allow investors to personalize their risk tolerance and other preferences while using AI tools to make investment decisions based on those preferences.
There are, however, some ethical concerns that using these types of robot advisors may create conflicts of interest, as some AI programs might favor specific funds or stocks that are sponsored by companies that make payments to the advising company, as listed on disclosures from the banks.
Greater Efficiency with Less Paperwork:
In the U.S., JPMorgan Chase & Co. has introduced a machine learning program called COIN, which has eliminated over 360,000 hours of work for lawyers each year, saving a huge amount of money and increasing productivity immensely.
COIN, which is short for Contract Intelligence, uses AI to review and interpret commercial loan agreements in just seconds, performing the kinds of analyses that would take a team of lawyers hundreds of hours to complete. As large banks begin to use this kind of technology, they will likely be able to save millions of dollars every year.
Improved Financial Security:
AI-powered security systems can identify potential illegal access points to a financial institution’s data or funds by simulating various situations in which a financial crime could be committed. Using machine learning technology, these tools can anticipate how someone might plan to attempt money laundering laundering or committing fraud, and then develop and implement preventative measures to stop these crimes before they happen.
AI technologies will soon be a core feature at all banks and financial institutions. As with any new tool, some consumers may be resistant to trying these technologies when they are first introduced. However, just like with ATM machines (automated teller machines), which are now commonplace, most customers, once they become accustomed to these tools, will soon recognize the significant advantages of utilizing AI-powered assistance over traditional banking resources.
It is important to point out that since AI and automatization will render a lot of jobs redundant in the financial sector, leaving many unemployed, there will be a pressing need to re-educate those people and help them find their place in the new job market.
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