Fintech and Artificial Intelligence (AI) are two rapidly growing areas filled with exciting developments. Fintech is one of the fastest-growing industries in the world, and AI R&D for fintech is generating a host of new opportunities to help It keep growing. Such is the significance of AI in fintech that its value in the global fintech industry is projected to reach USD 22.60 billion by 2025.
The use of technology, AI in particular, is not unusual for financial organisations or fintech organizations specifically. AI is already being deployed for a variety of applications within fintech, and its use is set to grow as this technology becomes more powerful. With both sectors continuing to expand, in this blog we look at how the development of AI will influence the future of fintech.
Streamlined risk management
Effective risk management is essential for fintech organisations. AI is a fantastic tool for fraud detection and managing exposure to risk, able to provide highly accurate results that are more reliable than using humans. Paypal has already utilised AI to provide a more advanced fraud detection service for its customers, with an advanced algorithm that rapidly reviews purchase history data to identify fraudulent transactions.
Using AI for these purposes is highly beneficial for anyone involved in fintech. The uptake of this technology is likely to more widespread as it becomes more sophisticated. Fintech companies, traders, and customers will all be better equipped to protect their assets as this type of AI continues to be developed and deployed throughout the sector.
The automation of trading
Whilst financial organisations have long used computers for trading, these have had multiple limitations and usually required human intervention. However, AI is changing the future of trading for fintech companies. With this technology increasingly able to learn from information, it can rapidly analyse vast amounts of information from a wide range of sources, including historical trading data and the news to make accurate and time-sensitive future predictions.
In a market filled with sudden changes, it’s vital to react quickly. This type of AI can respond rapidly to changing circumstances to generate accurate forecasting and decisions. As this type of AI is developed and becomes more powerful, it’s likely that fintech organisations will increasingly automate their trading in favour of the accuracy and responsiveness of AI.
More effective customer service
Both fintech organisations and their customers stand to benefit from the use of AI for customer service processes. Chatbots are not new technology, but they are continually being developed and becoming more sophisticated. They are able to respond to a wider range of customer queries and learn from their interactions. AI with Natural Language Programming (NLP), which relates to how AI interacts with natural human language, is able to understand and respond to a wider range of customer contacts. As this technology develops, AI will be able to independently address more and more customer issues.
With this type of AI becoming more sophisticated, it can be adapted to suit different functions. Such as banking or providing financial advice. As it continues to be developed, we can see AI increasingly being used to analyse data and provide customers with highly personalised financial advice, creating a streamlined experience. It also allows financial services to run continually 24 hours a day with the minimum amount of human intervention needed.
Many financial organisations already make use of this type of AI, with plans to continue doing so. It has been estimated in the coming years, the majority of customer interactions with fintech organisations will be with AI rather than human staff. Using AI doesn’t carry the risk of human error, which is a benefit for both customers and fintech organisations. Added to that, using this type of AI greatly reduces the costs of running customer service centres.
Uptake continuing to grow
The fintech industry is already a leader when it comes to embracing the benefits of AI. Going forward, this trend doesn’t show any signs of changing. It is reported that many fintech organisations are actively looking to increase their usage of AI in some areas, particularly customer service. This is no surprise – it’s clear that AI R&D for fintech leads to improved accuracy and streamlined processes. Benefitting both businesses and their customers.
There are even more incentives for fintech companies to integrate AI into their practices going into the future. Research and development tax credits are available for fintech organisations that are working to develop and implement AI technology. Integrating this type of technology into the industry more and more will bring a multitude of benefits to fintech organisations and their customers.
If you would like to talk about whether your company is eligible for R&D Tax Credits, then get in touch with our friendly team today.