The first reflections and works on artificial intelligence date back to the 1950s. Today, this discipline, at the heart of all debates, is beginning to shake up several sectors of activity. With the emergence of big data, research in this field is accelerating. Let us look in this article at its impacts on the banking and finance sector.
Artificial Intelligence (AI) is a set of theories and techniques that develop complex computer programs to allow machines to simulate certain features of real intelligence (reasoning, learning….).
It becomes a software that reflects the place of the human being and is implemented in several fields such as: trade, transport, health, personal assistant, industry, environment, defence, finance, etc….
Today, artificial intelligence makes it possible to achieve artificial vision, speech recognition, medical diagnosis and treatment of certain pathologies, image and video processing, predictive analyses, automation in a more intelligent way, the creation of humanoid robots, the simulation of complex systems, the creation of works of art etc….
With the advent of Big Data, the AI began to change certain habits in the banking and financial sector. Indeed, companies in these sectors have a large amount of untapped data at their disposal. Big Data has created an appropriate framework for the exploitation of its data.
This allows, among other things, the development of new algorithms, the processing of this mass of data with very powerful algorithms. This promotes, among other things, the digitalization of the financial sector, the transformation of trading activities, risk assessment, portfolio management, financial analysis, bank loans, etc…. Hence the success of fintech.
In terms of impacts in the banking and financial sector, we can mention:
– Business transformation
The AI will automate several tasks in the banking and financial sector. But it will not replace the human. The AI will help to develop trades and skills.
– In trading
The use of AI and machine learning in trading rooms has become a reality. Algo-trading takes into account market trends and AI gives a probability of occurrence of a transaction. Today, it is the automatons that execute stock market orders. Only the parameters are defined by humans. Automated writing of trading algorithms is trying to become a reality. This is starting to force traders to get into the code.
– Corporate Finance
The digital revolution is particularly affecting the purchasing and accounting functions. At this level, it is software that performs some daily tasks. This makes life easier for employees. It should be noted that the finance, purchasing and HR functions have a strong potential for digitisation.
– In asset or wealth management
The development of Advisor Robots by FinTech allows online portfolio management with a minimum of human intervention. In this context, two types of services can be distinguished:
– Advisory management: the investor manages his portfolio. He can choose whether or not to follow the advice given to him;
– delegated management: the structure manages the portfolio on behalf of its client. This is a management mandate.
The advantages resulting from these services are: price advantage, advice and ease of use. As a result, insurers, bankers and asset managers have started to sign partnerships with Robo-Advisors
– Business process automation
Thanks to artificial intelligence and automation, banks have considerably reduced the processing time of claims such as loss/stolen bank cards, claims reporting.
To do this, the AI makes it possible to extract in a claim declaration file, the most relevant elements to know the type of claim, to analyse the type of insurance coverage. This allows agents to quickly begin the compensation process.
This discipline also makes it possible to develop new recruitment procedures.
Improving the customer experience
AI can enable banks and financial structures to achieve a 360° view of their customers. Indeed, the AI can monitor social networks and evaluate the e-reputation of its customers. Thanks to the information collected in real time, it is possible to draw quick conclusions that can be made available to advisors.
This allows you to customize service offerings. Chatbots also save time for advisors. The latter can focus on higher value-added requests. All this improves customer relations, reduces costs and increases the efficiency of sales departments.
– Cyber security
One of the biggest concerns in the banking and financial sector is security against cyber attacks. Indeed, today we can witness the infiltration of institutions’ computer systems by more sophisticated malware. There are also the appearance of false transactions from a dubious destination or massive thefts.
To remedy this, banks and financial institutions use AI and machine learning to build a good defence. Indeed, the AI analyzes the client’s financial habits, detects unusual behaviours. It can then automatically alert the system to ensure the security of clients’ funds.
It should be noted that the development of the cloud and the use of blockChain technology combined with artificial intelligence will make it possible to create customized offers and design smarts contracts. We can also see the creation of an ecosystem in which banking services will be integrated with functionalities such as e-commerce, uberisation etc….
Les applications et usages de l’ia