Robots on The Rise. How AI Can Change the Financial World? Posted on : Nov 22 - 2016

Artificial intelligence (AI) is an important part of many popular technology industries – entertainment, automation, electronic gadgets and others. Recently, it has also started to increase its reach and importance in the wider banking industry and financial sectors. 

According to Steppe Hawking, the creation of a true AI will be the most important event in human history. This process is increasingly noticeable within the technologies such as blockchain, biometrics, quantum and cloud computing, etc.

Enterprises directly linked to the FX, binary options, fintech and cryptocurrencies need to confront with enlarged competition, tighter regulatory surroundings and customer requirements – solutions in the field of the artificial intelligence may become a valid response to the booming market.

Machines Better Than a Human

In recent times the saying that anything you can do, AI can do better is becoming increasingly popular. In the world of financial services it may take an entirely new meaning – though we often do not realize, AI is present all around us in many actions of daily life – natural language recognition, self-driven cars, chatbots, etc.

According to Pedro Domingos, the author of The Master Algorithm, “People worry that computers will get too smart and take over the world, but the real problem is that they’re too stupid and they’ve already taken over the world.”

Although this statement can be considered as slightly exaggerated, computers and artificial intelligence really have become and indispensable part of our lives. Still, how this may translate into the world of finance?

At what point can we trace the applications that make life easier for banks, brokerage houses, financial firms and their clients? Many examples can be specified, but let’s start from the customer support, transactions and helpdesks.

Automatic assistants like Siri or Cortana start to gain popularity not only in the daily tasks, but also in the world of finance and banking. Such products as Kasisto by SRI International, a virtual assistant in DBS digibank, secure transactions using voice recognition from Santander or Lubo prepared by RBS as retail banking helper.

All these examples and automated support systems can be directly transferred to the activities of online brokers specializing in derivatives.

Financial Analysis, Security and Fraud Detection

Although above described solutions are impressive, they are currently quite common. So how the AI was implemented on the other fields? A great example would be a startup called Kensho – supported by Google Ventures – currently it is actively used by such banking sharks like Goldman Sachs or 

JPMorgan. The tool for executing automated research and financial analysis provide immediate answers to questions expressed in natural language.

Transactions security and the service stability is another challenge faced by almost each brokerage. The response to cyber-attacks was presented by PatternEx – machine learning startup that developed a system to predict, identify and counteract 85% of the most popular attacks within the financial industry.

In the field of fraud detection, the case looks really similar. Feedzai machine learning services allows to monitor all customer’s authorization, clearing and settlement systems in order to detect any abnormal action.

Artificial intelligence undoubtedly affects the transformation of various industries – the financial world is no exception here. Institution which first begin to adapt to the changes will have a potential opportunity to take over the leading position in the coming years and decades. The race has already begun and will only increase its peace.  Source