AI in the financial services sector
Many businesses in the financial services use Artificial Intelligence (AI) to automate menial tasks, analyse data, improve customer service and comply with regulations. About half of financial services and insurance firms globally already use AI, according to a study by research group Forrester. This number is expected to grow as new uses are found and enabled for the technology.
The benefits of AI are that it can increase in productivity through automation, reduce human biases and errors caused by psychological or emotional factors; and improve the quality and conciseness of management information by spotting either anomalies or longer-term trends that cannot be easily picked up by current reporting methods. AI and machine learning are especially helpful as many new regulations are introduced. For example, the European Union Markets in Financial Instruments Directive II (MiFID II) expects a higher level of responsibility from senior management of financial services companies to review and consider higher-quality data from within the firm.
Many firms use AI to analyse stock market data and machine learning to improve fraud detection. AI uses patterns of similar chains of behaviour in large datasets to identify anomalies. This can help insurers and financial firms to determine whether a claim or transaction may be fraudulent. Especially anomalies in (open) geolocation data is used for fraud detection. The trend of using AI and automation in the financial services sector is expected to increase and to expand to more aspects of the industry.
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