I never thought humans could have an alternative brain that could make them more intelligent and competent than ever possible.
Can you guess what this alternate mind could be?
I will give you a few hints.
What do you do when you are unaware of a situation and want to know more about it?
What do you do when you do not have the time to make the calculations yourself?
What do you do when you want to feel like you are running outside of your living room?
The answer to all of these lied in our alternate mind’s creations. And those answers’ creator is referred to as Artificial Intelligence.
AI has been so immaculate in its performance and execution that considering it to snowball a domain that is one of the most crucial for us was a decision that needed to be taken.
Yes, I am talking about the financial sector, which is dominated by man’s most prized possession, money. This sector’s growth directly impacts the growth of all others. Why? It is because the funding needed by others is taken from financial services.
So, let us find out how well AI is making the financial arena blossom.
Although man develops artificial Intelligence, it can perform things and tasks at a much higher level of efficiency than its inventor. We can go wrong with our calculations, but a calculator would never do that; there is not even a one per cent chance of that happening.
So, in a domain where numbers are the only players, there is a high probability that human eye can foresee a few and make an erroneous judgment. In finance, this can become colossal for the organisation leading to its closure even.
That is why AI and all the software that it has manifested has removed the error from the equation and made for higher efficiency and productivity at work, especially in accounting and banking industries.
Imposing a wrongly calculated APR on loan is one such example that can be easily avoided using the marvel of Artificial Intelligence.
Inhibits Illicit Activities
With the emergence and use of Artificial Intelligence in finance, there has been a significant reduction in fraudulent practices in this sector.
Today, with AI having ingrained itself into the financial world, you would hardly ever get to hear that someone in a company has ripped his employers by millions and no one had a clue.
It is primarily because AI is not only efficient in the way it operates, but also because it has created the concept of financial transparency and conceptualised ways to make the same happen.
Financial transparency means that a company had to make its financial situation available to the public so that anyone who wishes to look into it can do it. It helps in constructing a positive and clean image of the company along with aiding it in raising capital whenever it may need to.
Even the government backs this concept because of its merits to the investors, the public and the company itself. No company can ever think about committing fraud this way.
We all know that Artificial Intelligence is much faster than humans, so it would be evident that it can help humans in economising time. And it does so brilliantly.
For understanding this one, let us look at two things that AI can do;
AI created chatbots, which work on a pre-installed algorithm that can enhance the customer’s experience and satisfaction. Ever been on a website, wherein a chat box appeared as soon as the page loaded completely, yes that is a chatbot, and I always welcome it.
AI helps in making future predictions based upon another algorithm that can analyse the current market trends and build a reliable forecast about future trends. Research, today, is done solely through AI.
As per these two,
- Firstly, not too much manpower would be needed to perform them, so we have saved the time of the employees and utilised them elsewhere.
- Secondly, the predictions would happen much faster than any human can ever make, meaning there would be more time on the hands of the employees.
AI can do all the grunt work so much faster and cleaner than any person can ever deem to do.
Capitalises Digital Platforms
AI has paved the way for digitalisation, and nobody in their right mind can deny that. Digitalisation is the concept that incorporates every digital technology into the world of business, and in this case, finance.
Did you know that many financial services, like loan acquisition and investments, can be done through digital technologies?
They can be, and with ease like no other.
You can apply for a 12 month loan using the search bar on Google. The lender you will be applying to will perform all the obligations on the internet itself.
From checking your creditworthiness to evaluating the loan amount feasible with your income statement, each of the things the lender has to do, he does it digitally.
I never thought this would be possible, but it is. I have taken a loan like this myself, repaid the entire sum and I never once saw what my lender looked like, I know its name, Huge Loan Lender.
This is AI impact on the world of finance.
Despite all of the positive influence of AI on financial services, there are still some challenges that need to be overcome to the best use of AI.
The foremost is the inability of using the concept appropriately. More prominent names can do it with ease; however, the smaller segment of this lacks the skills and the tools to capitalise the same.
Another challenge is to become accustomed to AI and its ways. For many users, the initial phase of change becomes exceptionally overwhelming and can even bring losses due to inefficient use.
In the end, all I want to say is that after you have leapt AI, although the beginning would seem rather daunting, the fruits you would garner after the groundwork has been done would not make you ever regret your decision.
And this is valid for every field AI steps into, not just finance.