Dec 2022
Fintech – An innovation creation of the 21st century that helps in financial transactions through digital technologies. It deals mainly with financial products and services. Their customers need not have to visit bank branches physically as fintech retains customers by digitizing the data. It also includes sectors like Retail banking, Investment Management and fundraising.
Financial sectors have gotten stronger throughout the pandemic crises by changing their business models and implementing AI (Artificial intelligence) and machine learning in the model. Financial activities are mostly done through apps, companies can obtain powerful insights through data points. Managed IT services in India are exploring different ways to use AI and ML in Financial technology, and many companies are benefiting from their implementation.
Most of us think that AI and ML are only for big companies with tech experts and a large pool of capital. These technologies are paired up with powerful apps and fintech companies large or small are using them for all sorts of purposes.
These are just few examples of most important uses of AI and ML in finance:
- Decision Making Process
- Customer support
- Loans and Insurance
- Forecasts
- Security and Fraud detection
- Financial Decision making process: With the help of data science and visualization tools, analyzing the data through apps has become easier and helps companies to make effective decisions.
- Customer support: AI chatbots are being used as a major channel that can interact with customers and resolve their queries.
- Loans and Insurance: One of the most innovative ways in which AI and ML are being used to reshape how insurance policies are evaluated. AI and ML can be used by banks to help automate and improve various aspects of the loan process, including risk assessment, credit scoring and fraud detection.
The credit score can be used to determine whether the borrower is eligible for loan and at what interest rate.
Overall the use of AI and ML can help banks to make more informed and accurate decisions about lending, which can improve the efficiency and effectiveness of the loan process and reduce the risk of losses for the bank.
- Forecasts: AI algorithms can analyze historical financial data and other relevant information to make predictions about the future financial performance. This way it can help in financial forecasting, customer behavior forecasting, Market forecasting and credit risk forecasting.
- Security and fraud detection: AI algorithms can analyze transactions and data and identify patterns that may indicate fraudulent activity.This way AI helps in fraud detection. It also monitors network traffic, identify potential threats, such as malware or unauthorized access attempts. It also verifies the identity of the user during the login process. IT consulting companies in India are collaborating with financial institutions to make their systems compliant and generate system alerts during outage and fraudulent activity. Overall , the use of AI for security can help financial institutions to improve security of their systems and data, reduce risk of losses due to fraud or cyber attacks, and ensure compliance with regulations.
Fintech has significantly reshaped the financial landscape in a number of ways:
- Increased competition- Fintech companies have introduced new competition to the financial industry, which has led to increased innovation and lower prices of consumers.
- Greater convenience- Fintech companies have made it easier for consumers to access financial services through the use of mobile apps and online platforms, which have increased the convenience of managing financial affairs.
- Improved accessibility- Fintech companies have made financial services more accessible to the underserved and underbanked population, such as those without access to traditional financial institutions or.Those with poor credit history.
Overall Fintech has significantly changed the financial landscape by introducing new competition, increasing convenience, improving accessibility, and increasing financial literacy.
