The various applications of artificial intelligence have found use in nearly all parts of the business world, and the financial sector is no different.
Here are some of the ways in which banks, financial advisors, registered investment advisors, and other players in the financial sector have been making use of artificial intelligence.
1 – Risk management
Artificial intelligence plays a big role in deterring credit scores. There are various approaches on how to determine someone’s credit score, and the vast majority of them rely on running user data by an algorithm that will assess the information provided and boil that person’s overall risk factor down to a number — their credit score.
This, in turn, is used to help financial institutions decide everything from which loans to approve and even what kind of interest rates they should offer. This type of financial data analysis was performed before the use of AI became widespread, but modern solutions make the process easier, faster, and more accurate, all at a scale never seen before.
2 – Invoice processing
AI automated invoice processing solutions have quickly become a must-have for many industries in the financial sector. This type of software can help companies ensure invoice accuracy, automatically approve invoices, identify any sudden changes on regular invoices, and more. These solutions can also handle the bulk of the data entry process that is often involved with processing incoming invoices.
3 – Customer management
While most scripted chatbots are barely worth considering “artificial intelligence”, some financial institutions have taken to using chatbots that can look up answers online and even use machine learning to figure out the best responses for common questions. These are particularly useful for big banks, as any question a bot can take care of is a question a human employee won’t have to take care of.
4 – Fraud detection
Machine learning algorithms can sift through financial documents in order to spot patterns and incongruences, and there are already algorithms that have been trained specifically to identify potential cases of financial fraud. These are used not only by law enforcement agencies but also by banks and investment funds looking to make sure they’re making safe investments.
The use of fraud detection software may also be required for banks that wish to comply with local and international laws. Especially when it comes to laws related to money laundering and tax evasion.
5 – Rule compliance
The massive amount of rules that impact the financial sector combined with constant regulation changes can make it hard for agents in this market to make sure they’re always in compliance. To help with this problem, AI applications have been designed to keep an eye on new reports and regulation changes and to use that knowledge to make sure operations within a bank or firm are complying with the newest regulations.
AI designed to help with rule compliance isn’t perfect, but they’re good enough to be a commercial product today. And of course, like every other implementation in this list, this type of AI is only expected to get better over time.