Introduction:
As with many other sectors of society, Artificial Intelligence has pushed its way into the domain of finance. Finance is an essential part of our existence. It is one of those things which is so integral to daily activities that we sometimes don’t even realize is a part of it. To regulate these activities more effectively the incorporation of modern automated technology has become crucial. In an effort to optimize growth, AI can do some things faster than manual operations can do. Moreover, their targeting of audiences based on collected data is also a step forward in this sector.
What is Finance:
The financial activities undertaken constitute the basics of finance. It is a broad term that deals with the management of money and ways to raise it for any expenditure. Finance includes activities such as banking, leverage, investments, capital markets, and many other things. It is through this medium that the allocation of monetary resources is done by businesses. A better understanding of it helps a business flourish and it checks them against any threats or risks detrimental to their interest. Nowadays with better quality AI, many enterprises depend on their features to assist them in their development.
The Role of AI:
In the vast domain of finance, we come across three distinct divisions which are the personal, the public, and the corporate finances. All these categories are pretty keen on utilizing AI in order to prevent the uncertainty of economics. Many people who have little to no knowledge of finance also enter the field with their assistance. The management of monetary resources is key and this has been made easier with the advent of artificial intelligence.
AI is used in banking to personalize your experience. This has proved beneficial to the customers looking for quick responses to their problems. They help the users with their simple requests by generating an automated response. Another great advantage of this is its detection and prevention of suspicious activity. This helps to keep the user safe and protected from any fraudulent transactions. The versatile algorithm-based systems can maneuver around malfeasance to detect the error and alert the user. This quick-paced functioning of the algorithm system is what defines the merit of artificial intelligence. In the realm where actions need to be taken within moments, rapid detection of trends has led to better trading decisions. This essentially results in the acquisition of better profits for those involved with the system.
Use Cases:
PayPal has implemented AI technologies in its business and industry to strengthen the authorization rate of transactions and to prevent the rate of fraud transactions. It has used Machine Learning models to increase the rate of successful transactions done on its platform by predicting and solving the issues causing payment interruptions. It has implemented machine learning algorithms to draw relationships within the data to prevent fraudulent transactions.
American Express a company started in the mid-19th century has more than 113 million cards and a business of more than 1.23 trillion USD. It generates its profits from sources like merchant fees, the interest of late payment, card fees, prepaid cards, etc. During the year 2020, it has got reports of more than 390000 cases of fraud which was 40% higher than the year 2019. So it has established American Express AI labs to implement AI in its business to get more and provide efficient services. It has used the Gen X model to prevent fraudulent transactions in this pandemic time and implemented the BERT model to know the intention of its user.
Conclusion:
The complexities of performing in the economic frontier have always been there and therefore it is required to comprehend it as much as possible. However, the recent rise in AI technology has allowed many smaller actors to enter the stage. Moreover, its benefits have been manifolding which amounts to it being desired by different categories. Even by those who don’t possess the financial wherewithal of big businesses. AI protects the users from the trickery that has been associated with the unfortunate rise of malicious activities in modern times. All things considered, Artificial Intelligence has fast-tracked its way into the world of finance.
