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• Data Science Central Weekly Digest, 4 Jan 2021

FinTech: How AI is Improving This Industry

•  by Ryan Williamson 

FinTech has achieved staggering growth levels over the past few years, establishing itself as one of the mainstays of the modern world. And as customers become more and demanding and the competition in the market continues to rise, the focus on this sector and the many technologies that aid and enable it has grown too. Take artificial intelligence and machine learning, for example; this potent technology has already demonstrated a wide scope of application in this sector, especially thanks to its ability to execute tasks that generally need human intelligence. Now, as the FinTech industry also becomes increasingly popular, its union with AI was only a matter of time.

In fact, according to a recent study, AI’s share in the FinTech sector will touch about $35.4 billion in value by 2025. This staggering figure begs the question: What exactly is artificial intelligence contributing to the financial technology market? Well, the answer to that question is: Plenty. For starters, FinTech companies all over the world are now tapping into artificial intelligence to offer enhanced services, such as online financial coaching and advice, to their customers. Now, allow us to walk you through some of the other critical AI applications in this industry.

1. Fraud prevention: As the market offers an increasing number of mediums for transactions, fraud concerns have also gone up. AI can tend to these concerns since it can identify fraudulent activities based on the already established baseline for standard customer behavior. It, then, not only flags such potential transactions but also enables measures aimed at the prevention of fraudulent activities.
2. Automatic claim process: To offer tailored services to customers, financial institutions are now using AI to provide exceptional, high-quality services. Case in point, automation of the claims process. AI-based chatbots help with that by engaging with customers, collecting data, evaluating the claim's veracity, and triggering the claim process. This not only accelerates the whole process but also allows employees to focus on other essential tasks.
3. Customer support: It is unlikely you have missed business’s increase in customer experience in the past decade or so. This has been an essential area of focus for the FinTech market as well. But how is the sector going about it? With help from artificial intelligence, of course. AI has brought along a plethora of tools, including intelligent chatbots, that serve to ensure the delivery of top-notch customer support round the clock. A study predicts that AI can also help the FinTech industry save as much as 22 percent costs too. That’s about $1 trillion, in case you were wondering.

As the world continues to generate a staggering amount of data with every passing day, the scope of AI application in this sector is bound to grow for the foreseeable future. And suppose you too wish to leverage it to your company’s benefit. In that case, we recommend engaging the services of an expert fintech application development company at the earliest.