Artificial Intelligence is something that most of us are now aware of as it is the lead factor in integrating technological changes into our daily products and services. The advancements in Artificial Intelligence have left no field untouched, including the finance sector. AI in the finance industry is giving rise to a whole new consumer experience and the rise of FinTech. Financial institutions, such as Shriram Finance, which are looking to provide quicker and better services to their customers are integrating AI into their services, making them more efficient and prone to human errors.
First, let us understand what AI is and what its advantages are.
Artificial Intelligence is typically the human intelligence embedded in machines. When a machine is programmed to perform the functions of humans and mimic their cognitive abilities and actions, such a machine is said to demonstrate artificial intelligence.
Artificial Intelligence has gained momentum owing to its advantages, and every field is becoming highly dependent on artificial intelligence. The advantages of artificial intelligence are as follows:
- Decrease in Human Error:
Tasks performed by humans are prone to human errors. However, if the same tasks are performed by machines and computers which are thoroughly programmed, then human errors can be eliminated.
- 24*7 Availability:
Computers and machines have no limitations if proper maintenance is done. Therefore, they can outperform humans In terms of their capabilities and longevity in performing tasks.
- Performing Humanly Impossible Tasks:
Tasks that are hazardous from the human point of view can be easily performed by robots, like fire-fighting, exploration of mining and deep oceans, etc.
- Digital Assistance:
The most common example is “Press 1 for this”, “Press 2 for that”, etc. whenever you call customer service and chatbots that are available on the websites to assist you with your requirements.
AI in the Finance Industry
The face of the finance industry started changing with the advent of the digital economy and a humongous increase in day-to-day transactions using digital interfaces like mobile banking, net banking, and payment wallets. The data generated from such transactions and the spending habits of humans are a gold mine for the companies providing financial services. AI financial analysis can beat human financial analysis when the volume of data to be processed is huge and involves complex transactions.
AI Applications in Finance
AI is becoming increasingly important to cater to the following needs of the financial industry:
- AI in Personal Finance
People are gaining financial literacy and are more inclined to manage their finance. With the induction of AI in personal finance, many financial institutions and wealth management experts can provide 24*7 wealth management and consultancy services helping consumers to track their spending habits and cater to their financial needs.
- AI in Risk Assessment
Risk assessment in the finance sector majorly includes the risk associated with financing a potential customer or entering a legal financing agreement. Assessing such kinds of risks involves examining the credit history of the customer. Going through the entire credit history, the details of the transactions and the business viability is a tedious task, and it does not stop here. It also involves analyzing such transactions and coming to a conclusion on whether the customer is worth financing. Who do you think can perform such a task- AI embedded machines only, especially when the records involve thousands of transactions. For example, Shriram Finance Artificial Intelligence is programmed to go through a chunk of data to analyze and reach conclusions faster and foster quick decision-making.
- AI in Corporate Finance
Corporate finance becomes crucial for financial institutions as they are one of their major customers. The transactions entered into by the corporates are huge and financial institutions need to keep a constant track to detect any irregularity or anomaly. Such a task can only be performed using artificial intelligence.
- AI in Financial Advisory Services
AI in the financial sector has great potential when it comes to financial advisory services. Currently, chatbots are used by almost all the wealth management experts who have an online presence to understand the investor’s needs. Integrating AI with human experts can provide the best advisories as per the latest industry trends and options.
- AI in Stock Trading
Stock trading involves several data that need to be analyzed within a short period to make informed investment decisions. Predicting future patterns based on historical data requires the assistance of learned machines and tools such as specialized computer software. AI financial analysis can process a huge amount of data within a short period to provide conclusions which are then used by traders to decide how long to hold a particular investment.
- AI in Fraud Detection and Management
Instances of financial fraud are increasing at a rapid pace. Who hasn't heard about Vijay Mallya, Nirav Modi, Mehul Choksi, Satyam, etc.? Such frauds overburden the financial systems of the country. Therefore, there is a constant need for financial institutions to keep a track of the transactions undertaken by their customers to whom they have advanced loans to avoid such frauds as it is the money of the common man that they are dealing with.
- AI in Financial Management
Managing finances has become tricky, especially when countless materialistic things fail our financial planning. Here, AI may come to the rescue of those eager to manage their finances more fruitfully by tracking and eliminating their wasteful expenditure so that they can decrease their spendings and increase their savings and investments.
The Emergence of Fintechs: Future of AI
Fintech, also known as Financial Technology, integrates technological developments to provide AI-based financial services. Recent examples of Fintechs include Lendingkart, Paytm, Policybazaar, etc. Not only Fintechs, but other financial institutions are also integrating Artificial Intelligence to automate their financial services, like Shriram Finance Limited. These Fintechs and financial institutions are bringing a revolution in the finance industry by automating all the traditional financial services and making them available to consumers with just a click on their smartphones. Whether it's about checking credit scores, taking insurance policies, availing loans and finance facilities, investing, or enhancing financial knowledge, all these services are easily available to the general public on their smartphones. One does not have to run from pillar to post to avail of these services. Thanks to artificial intelligence.
Only AI financial analysis can handle such vast amounts of data as analyzing them is prone to human error, which can lead to losses of millions. Shriram Finance Limited is focused on enhancing user experience and caters to customer needs using artificial intelligence. We strongly believe that AI is deep-rooted in our daily needs and only the financial institutions that provide AI-based services will be able to cater to the needs of the customers as others will become obsolete in the long run as customers want quick service now.