The rise of artificial intelligence (AI) solutions has redefined modern industries, including financial technology.
Today, more digital banks and payment gateway providers rely on AI solutions to improve decision-making and automate workflow. In fact, forecasters expect the AI in fintech market size to grow to $61.3 billion by 2031.
New digital solutions create a more secure, efficient, and inclusive financial landscape for customers and businesses. Let us look at three crucial ways AI tools are changing the game for modern fintech companies.
1. Promotes Customer Service and Engagement
AI-driven virtual assistants and chatbots have become game-changers in the industry, elevating customer engagement and satisfaction. These solutions handle routine inquiries, offer instant and personalized customer support, and provide product recommendations. Some can even assist employees with account management. Moreover, AI-powered customer service can be available 24/7, allowing customers to get help anytime.
Businesses can collect and analyze customer data using AI solutions to understand their preferences and buying behaviors better. They empower FinTech companies to provide personalized advice and support customers in making financial decisions. This level of customized attention significantly improves the client experience while fostering growth.
One of the most popular chatbot solutions today is ChatGPT, a large language model (LLM) that generates texts and conversations. It relies on a “reinforcement learning from human feedback” (RLHF) method to provide human-like interactions, which can be valuable for customer service.
2. Automates Credit Risk Assessment
Traditional credit risk analysis relies heavily on historical financial data, which can only partially determine credit risk. However, with the help of AI tools, users can evaluate creditworthiness by considering a broader set of factors, including online presence, social behavior, and transaction history. This process provides a more holistic and accurate assessment of credit risk.
With AI, finance companies can analyze massive amounts of consumer data for precise credit evaluations. Modern AI systems today can assess clients’ cash, investment, and credit accounts to get a clear picture of financial health. By gaining access to customer data, AI can streamline account support and help financial institutions address real-time developments.
AI systems can compare and analyze information to assess if a client is eligible for specific products or services. Banks can use a large language model (LLM) to monitor client data and determine risk factors. Meanwhile, fintech companies can use the same tech to offer customized loans and insurance policies depending on unique client needs.
3. Strengthens Cybersecurity and Fraud Detection
The rise of online financial services, payment gateways, and digital transactions highlighted the danger of cyber threats and fraud. Fintech companies making profits through investment platforms, such as stock trading apps for teens under 18, and other finance solutions require cybersecurity and fraud detection systems to keep customer data safe and secure.
Fortunately, AI tools can help reinforce a strong defense against malicious hackers. According to an analysis from market forecaster Juniper Research, firms can save roughly $10.4 billion by 2027 with the help of AI-powered fraud detection and prevention systems.
AI algorithms can analyze vast amounts of client data in real-time, monitoring various transactions to recognize patterns and detect anomalies. Businesses can quickly spot potential security threats and gaps in their systems with the help of AI-driven cybersecurity systems.
These sophisticated tools can distinguish legitimate customer behaviors from fraud activities, blocking unauthorized access and preventing financial loss.
These are three simple ways AI is changing the fintech industry today. With the help of various AI solutions, fintech businesses can offer improved customer service and keep client data safe and secure.