The Continuing Evolution of Artificial Intelligence: Banking and Investments
Artificial Intelligence (AI) has passed the stage of a buzzword and is now changing banking and decision-making by finance and investment professionals.
From AI chatbots that can handle customer inquiries to algorithmic trading systems that can help identify emerging trends in the world's markets, AI is ubiquitous. So, what is the relevance of this to you as a customer and/or investor interested in the new world of finance?
Banks have been implementing AI technology to reduce costs and improve customer experiences. With AI powered chatbots working 24/7, banks can eliminate the reliance on people to answer questions and resolve issues, while increasing efficiency and productivity, but also decrease operational costs.
Fraud detection is a prominent way AI has changed banking responsibilities. While traditional processes typically take time to review and analyse transactions and transaction patterns, AI models can do this nearly instantaneously to detect patterns and trends that identify irregular or potentially fraudulent transactions before they happen.
AI has also assisted banking regulation and compliance, and thanks to AI every transaction a bank conducts can be monitored, flagged and reported when there are suspicious activities. This maximizes banks' ability to meet regulatory compliance and lessen human oversight responsibilities with its costs.
AI is revolutionizing the investment landscape. More companies are implementing algorithms that analyze information to find investment options and project market directions. There are algorithms that can identify patterns with staggering accuracy that make it easier for investors to make investments with confidence and act quicker than the human eye can observe trends.
Wealth Management is also changing with AI. Robo-advisors use AI to provide investment advice and create portfolios based on unique financial situations. Robo-advisors allow a larger number of people, products and strategies to be more and more available to consumers who do not have as much wealth.
Further, AI also provides real-time reinforcement in portfolio enforcing habits. It consistently makes analysis of the current market and suggests changes to the current holdings that allow the investor to focus on what is different than safest. It also allows the investor to manage risk vs. return based on current market conditions.
AI comes with benefits and challenges. As it exclusively depends on data, it makes the relevance of quality information essential so security is not compromised. As AI develops and continues to evolve, transparency and avoidance of biases are paramount to maintain trust and fairness.
The development of artificial intelligence led to rapid adoption in the finance sector also raises a concerning question of potentially displacing jobs. As automation takes over 'normal' tasks, the workforce will need to be continually reskilled or upskilled for other work that demands a level of activity AI cannot achieve.
Despite these obstacles, the potential of AI to change the way we bank and invest is unforgettable. If we can effectively use AI, we should be more personal in our delivery of service, more efficient business processes, and have more opportunities to grow.
AI is not just a future development, it's already here now shaping the future of finance. Regardless of whether you are a customer that simply enjoys being able to receive quicker service; an investor looking to use tools that can buy/sell at more acceptable levels; or a profession in the industry navigating the uncertain waters of continued evolution of the industry, AI is here and is already making its impact. How it will affect your experiences of banking and investment in the future is what is yet to be seen, who embraces the technology as thoughtfully as we can will determine that!
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