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Dec 2, 2021
Min Read

AI Technology Trends Transforming Financial Services

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Manish Rai
VP of Marketing
SUMMARY

A World Economic Forum survey conducted last year found that 85% of financial institution executives are currently using some form of artificial intelligence (AI), while 77% of respondents expect AI to become essential to their business by 2022. AI is disrupting business processes across virtually every industry, and financial services is leading the pack—a separate O'Reilly Media study found that financial services respondents report the highest levels of mature AI practices out of any industry.  

Companies like J.P. Morgan, Bank of America, and Morgan Stanley already use AI to enhance data analytics, make credit decisions, and mitigate risk. However, artificial intelligence is no longer reserved for large, multinational corporations with deep pockets. Thanks to the emergence of no-code solutions for building AI applications, rising compute power, and declining compute costs, artificial intelligence has never been more accessible to nontechnical business users. This article explores the technology trends transforming the financial services industry, as well as real-world applications of AI in finance.

Benefits of AI for financial services providers

The banking industry has proven itself adept at adopting the changes needed to meet evolving customer demands. In the 1960s, the first ATMs were installed, and ten years later, payment cards rapidly became the status quo. Next, much banking activity went online at the beginning of this century before mobile banking became the norm around 2010. Now, digital transformation has opened up a new and important opportunity — the use of artificial intelligence in banking and financial institutions.

But the future of AI in banking is not just about better customer experiences, there are huge operational savings at stake as well. According to research by Business Insider Intelligence, by 2023, banks are projected to save approximately $447 billion by developing and implementing AI applications.  

Real-world applications of AI in finance

When used correctly, AI is capable of streamlining operations, reducing costs, improving customer engagement, and much more. With such huge potential, it's no wonder banks and other financial institutions are increasingly turning to AI-powered solutions. A few of the top applications of AI in finance include:

  • Automating repetitive tasks: Whether it’s a simple (yet repetitive) task like data entry, or something more complex like identifying fraud, intelligent automation fueled by AI can eliminate human error, improve data accuracy, reduce turnaround time, boost employee morale, and more.
  • Improving customer service: AI-enabled chatbots respond to questions posed in natural language without the need for human workers. Bank chatbots are commonly used to automate repetitive tasks, such as greeting customers, obtaining or providing information, and accepting payments. Custom AI assistants are generally more effective and secure. Researchers have estimated that financial institutions save four minutes for each communication that the chatbot handles. By 2022, this will net cost savings of over $8 billion per year across the banking industry.
  • Mitigating risk: AI can help banks monitor for threats, fortify the security of their systems, and identify fraud. Artificial intelligence can also be used to monitor transactions, analyze customer behavior, and log information for regulatory purposes or audits.  
  • Personalizing customer experiences: AI can be used to convert confusing transaction IDs into clean merchant names, as well as sort transactions by category. This not only improves customer experience, but also increases customer engagement.  

Finance has a future with AI

McKinsey estimates that artificial intelligence technologies could deliver up to $1 trillion of additional value each year for the global banking industry. Deploying AI technologies at scale may be the key to remaining relevant. Deloitte says that to reap the full benefits of new artificial intelligence and machine learning technologies, banks must move beyond the hype and consider the practical applications of AI— like those we have explored in this article. Lastly, Gartner warns us that artificial intelligence is a game-changer for the banking industry, yet only 25% of banks have successfully deployed it in production. Are you in danger of being left behind?

Explore these additional artificial intelligence resources

AI solutions in banking, insurance, retail, and more are driving innovation and transformation to improve customer satisfaction, savings, and organizational performance. Check out these additional artificial intelligence resources:

  • Book a personalized demo to see how AI can benefit your scenario.  
  • Read our blog to learn more about solving complex problems with AI.
  • Browse our marketplace and start using AI applications right now.
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