From Fiction To Reality: AI & The Financial Industry

Artificial intelligence is growing exponentially, with the AI industry growing 16.4% year over year. 

You’ve probably already seen more than one digitalized portrait of a friend or perhaps an influential person you follow. Lensa AI is an app that creates these images in various categories (i.e., anime, cartoons, and middle ages). What requires hours or days of work for artists takes this application minutes to develop. The popularity of these computer-generated portraits has sparked conversations about AI and how it’s changing different industries. From healthcare to finance, are you aware of how your life might change due to artificial intelligence? 

Each Invention Opens the Door for Five Others

Artificial intelligence has continued to impress individuals and revolutionize industries. How we operate and work is ever-evolving, and AI makes adaptations quicker. 

There are already various industries where these developments are making a big difference. One example is healthcare, where technological improvements are helping physicians’ accuracy and productivity. Another example is the automobile industry— think of Tesla’s driver assistant software, sparking discussions around connected, autonomous, shared, and electric (CASE) developments. Don’t be surprised if, in the near future, you can “drive” a car without a driver’s license.

The Finance Photo Generator

With all the buzz around images you no longer have to pay thousands of dollars to generate, you might question how these innovations translate into your finances. 

Members of the Forbes Technology Council gathered to predict which industries will change and benefit the most from AI. As you can expect, their list included logistics, cybersecurity, healthcare, research and development, e-commerce, and financial services. Some experts believe the financial Industry’s adaptation to AI is crucial, since it will be the biggest tool for fraud prevention. Moreover, AI will continue to improve its capacity to analyze consumer behavior and identify potential opportunities. 

The financial industry is beginning to recognize artificial intelligence’s potential to transform the way it does business. AI-based technologies automate and optimize financial processes, improve decision-making, and reduce costs. 

Here are some examples of how AI has been adopted in the financial industry: 

1. Fraud Detection: 

This technology can identify abnormalities and quickly protect your accounts after any suspicion. 

2. Customer Service: 

Chatbots and virtual assistants might not be your favorite, but they are a big part of this automation process. These programs get closer to responding and solving inquiries as humans do each time. 

3. Investment Management:

With the right software and algorithm, these developments can analyze market data and decide how to account for risk and return. From a wealth management perspective, this may allow financial advisors to become even more focused on providing genuinely personalized planning and strategy services.

4. Credit Risk Assessment: 

Following up on investment management, AI can analyze financial histories and predict results. This may help individuals better manage their risk tolerance. 

5. Trading: 

AI algorithms can analyze market data and execute trades in real-time, improving the speed and accuracy of trades.

6. Robo-Advisors 

Robo-advisors are alternatives to human financial advisors and provide investment services using mathematical algorithms. Even though they’re an automated system that improves effectiveness, they cannot operate without human interference. They are an important advancement in giving people access to financial recommendations, but they often lack the granularity and “human element” that real-life vetted advisors provide.

Does AI Pose a Threat?

There are various risks and ethical considerations that come along with artificial intelligence. A study by Pew Research Center points out experts’ eagerness toward AI’s capability of amplifying human effectiveness. However, they also discussed their concerns about how these technologies threaten human agency and autonomy.

Even though a robot might not take over your bank accounts and financial portfolio, experts worry about the involvement of AI in the financial industry and what could result in data abuse and accessibility issues. Most commonly, there are conversations about the equal playing field for investments and how to monitor AI developments. These issues are yet to be addressed, but the good news is that the future is nearer than we think, and with it come answers.