How AI and Machine Learning are Transforming the Financial Industry
The financial marketplace has been in a period of transformation for years. As companies continue to reimagine financial services and find ways to better serve the marketplace, new ventures have sprung up and entire industries have been developed. Already 70 percent of the financial tech marketplace is using automation, artificial intelligence, and machine learning in some way, and AI and MI are expected to have one of the most profound impacts on the industry in the coming years.
Technological Transformation is Underway
Technology has effectively disrupted the financial marketplace in Canada and across the globe. AI and MI have made it possible to not only receive huge amounts of information, but to process and analyze it efficiently. Using these advancements, financial companies are using AI and MI to create designs and algorithms that have rapidly improved their decision-making.
Lending is no longer a guessing game by brokers and underwriters, nor is it contingent on simple parameters of income and credit score. Financial companies are dipping into underserved markets like alternative lending, confident that their algorithms and modern business models will capture a large market of those who need to borrow while boosting profitability.
Industry Change is Coming
While start-ups and small fintech firms have led the way in this technological revolution of financial services, there is still more change to come. AI is estimated to save the financial industry up to a trillion dollars despite investments in innovative products and technology. This technology is redefining the banking industry, and more positive changes are expected including:
- Automated customer support. Chatbots might not every fully replace human support, but a massive number of these automated customer support apps are being deployed online with customers and they are working to help resolve issues. Customers get answers quickly, companies save money and boost customer confidence and satisfaction.
- Fraud defense. Unfortunately, cybercrimes are growing right along with the digital transformation in money matters. Fortunately, fintech firms can fight back using advancements in technology. AI and MI can easily spot and flag suspicious activity while almost simultaneously informing consumers about the activity in their accounts to better protect them.
- Harnessing data science and visualization. Big data is only as good as the technology that can harness it and make it work for us. Applications are changing complex information into simple patterns and processes that financial companies can easily harness.
- Payment potential. The world of payments and payment processing has only just begun to work with the possibilities of AI and MI. Consumers are ready for an even less-hassle free buying experience and AI is giving it to them, eliminating virtually all friction in the point-of-sale process, not just online but in storefronts thank to digital wallets, digital cash, and geofencing technology.
While the fintech scene in the United States might be larger, where there are almost three times as many financial firms as there are in Canada, innovation is happening here and across the border. Every new technical development is an opportunity for improvement and automation in banking and financial companies. Canadian and United States firms are pushing forward into a rapidly improving world of AI in finance.