The subject headline in this Finextra piece is highlighting an overview of some categorical use case scenarios where capabilities residing under the AI umbrella are having an impact on the delivery of financial services. Members of our commercial and separate emerging tech advisory services will have the benefit of deeper dives into some specific uses across retail and corporate banking:
‘More than 60 years have passed since artificial intelligence was a daring concept at Dartmouth Сollege which only got half of the requested funding. Right now, AI is a $9.5 billion industry, projected to reach $118.6 billion by 2025, according to Statista…Due to its immediate applications in streamlining processes, improving customer care, and managing risks, it has been widely adopted by the frontrunners of the financial industry. From NLP to replace front desk and call center employees to robots analyzing transactions and loans, there is a way to use machine learning in the banking and payment sector.’
The author points to four categories of current and future impact:
- Better Risk Evaluation – this is based on machine learning capabilities and runs the gamut from credit decisions (as we see in alternative lending platforms) to fraud management (e-commerce and enterprise patterns), as well as in capital markets
- Personalized Customer Care – the author stays in the ‘retail’ lane here with chat bots and so forth, but there are certainly corporate applications as well
- Automated Trading Platforms – using big data for high frequency trades using information collected across multiple domains, often in real-time.
- Process Improvement – the author restricts the summary to synthetic fraud and identity verification, but for sure there are already specific corporate banking use cases, which we most recently reviewed in a research piece on receivables management.
‘Finance is a sector that is a rather late adopter of new technologies due to regulatory and compliance requirements; yet it is also one highly interested in cutting costs. This puts AI companies in the position of having a harder time to enter this market. However, this market offers potentially high payoffs once the tech goes mainstream.’
Following the space is part of our extensive coverage of fintechs as applications apply across financial services.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group