Revolutionizing Finance: The Impact of Artificial Intelligence Applications
The Impact of Artificial Intelligence Applications in Finance
Certainly! Artificial Intelligence (AI) has made significant strides in the world of finance, transforming how we manage money, make investments, and even prevent fraud. Let’s explore some of the key applications of AI in finance in a human-friendly way:
“Artificial Intelligence Applications in Finance”
#1 Robo Advisor:
“Invention of artificial intelligence in trading is similar to caveman inventing fire.”
Robo Advisor is an automated portfolio manager empowered by artificial intelligence and ML algorithms that scans market data and predicts the best stock or portfolio for trading based on user preferences.
“For example, Kavout developed “K Score” using its Kai intelligence platform. The trading bot processes massive sets of diverse data and runs predictive models to develop a stock-ranking system. Besides, it uses an AI-powered pattern recognition technology and a price forecasting engine to suggest top stocks to invest in and worst stocks to sell.”
#2 Credit Scoring:
The artificial intelligence applications used for credit scoring analyze a huge amount of data collected from a variety of conventional and non-conventional data sources. The application is capable of analyzing and generating credit scores via an innovative lending system. The AI-based robust credit scoring model covers even people having a limited credit history.
“For example, GiniMachine is a credit-scoring platform that analyzes historical loan data and creates a report using artificial intelligence. GiniMachine then uses a deep-learning neural network to calculate credit scores from the report.”
#3 Claims Automation:
Insurance companies are using AI and ML-based technologies to automate many aspects of their operations. Recognizing human speech, images, and machine translation have helped digitize and automate the claims process.
“For example, Fukoku Mutual Life, a Japanese Insurance company, developed an app using IBM’s Watson AI technology to process medical claims. The app automatically accesses all the relevant information for a case, mines it for insights, and calculates accurate pay-outs. Yet, they need humans to approve and release the pay-out.”
#4 Algorithmic Trading:
AI algorithms analyze market data and execute trades at speeds and frequencies impossible for humans. These algorithms can identify profitable trading opportunities and make split-second decisions, optimizing investment strategies and improving overall returns.
#5 Customer Service:
AI-powered chatbots and virtual assistants handle customer queries efficiently. They can help with basic banking tasks, provide information about account balances, and even assist in setting up appointments with financial advisors.
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