What Are The Creative & Destructive Impacts Of AI-Powered Fintech On Financial Services?

    

Simple mobile solutions with AI technology can help your customers take advantage of your services by answering basic questions. Thanks to improved functionality, simple AI can help provide analysis of irrational purchases, recommend ways to save, and remind everyone of the date of mandatory credit card payment. [Sources: 8] 

    

Transformation means bringing technology into every aspect of business to create a better and more streamlined customer experience. Technical solutions such as React can save a lot of time for customer service staff and recruitment teams. If you suffer from constant staff turnover, AI chatbots may be the answer. [Sources: 8, 10] 

    

For example, traditional financial firms like Pingan Group (a Chinese industrial and commercial bank) and Morgan Stanley (Goldman Sachs) are using big data and other new technologies to transform their services. However, despite significant capital, most banks lag behind consumer tech companies in their efforts to attract customers with superior service experience. Increasing competition from fintech start-ups that use technology to create unique customer experiences in banking and other financial services is forcing big banks to respond and innovate as quickly as possible. [Sources: 1, 2, 6] 

    

As a result, institutions need more detailed insights into customer behavior outside financial services and need to focus more on delivering what customers want. For example, banks with huge amounts of consumer spending, savings and investment data that can be fed into AI algorithms to add value to their customers will need human financial literacy and new expertise, and these insights will form the basis for customer seminars and personalized financial planning services. The data, analysis and AI skills needed to build an AI bank are largely alien to traditional financial institutions and organizations must develop detailed strategies to attract them. [Sources: 6, 9, 11] 

    

Artificial intelligence in the banking industry can solve routine tasks, offer improved solutions, and bring new value to the industry. To remain competitive, established banks must become an artificial intelligence vision and implementation (as discussed in our previous article) and that means transforming the entire stack of skills, including engagement levels, AI-based decision-making, core technologies, data infrastructure and operating models. In this article, we look at how banks can take an AI-first approach to reinventing customer engagement. [Sources: 6, 8] 

    

In this environment, financial services companies must change the way they operate and the type of products they develop to compete for customers. Today, banks need to build a banking stack that enables them to have a platform where customers and third-party providers can connect and offer flexible and personalized experiences to end users. In addition, new players form alliances and raise funds in the market, and they develop social media buzz to demonstrate their capabilities through customer partnerships and ultra-fast service responses. [Sources: 1, 9, 11] 

    

The success of ATMs has acted as catalyst for the introduction and diffusion of other innovative devices including automated ATMs (often described as a combination of one ATM at one location, an Internet connection to the bank's website and a telephone connection to customer service) [5] (P 500 ). The introduction of these facilities not only helped to keep operating costs at a modest level, but also made banks more comfortable for their customers. [Sources: 0] 

    

These innovations have expanded access to the entire financial sector, which includes most companies around the world. Financial organizations that want to remain relevant must transform themselves into some kind of FinTech company. The main players in most FinTech innovations have already produced other innovative FinTech solutions that are likely to emerge in traditional financial and banking systems. [Sources: 0, 10] 

    

The explosive growth of the past decade, in which banks had a lot of structured and unstructured data at their disposal, coupled with the growth of cloud computing and machine learning has created a perfect storm for the use of artificial intelligence across the banking and financial services landscape. The hope is that the use of fintech and big data in financial services will have a greater impact on the quality of financial transactions made available to the financial sector across socio-economic and geographical boundaries. [Sources: 1, 3] 

    

This effect has prompted traditional banks to look for new technologies to keep pace with the speed of the Internet. In the financial sector, more and more industry giants invest in blockchain technology startups and work with startups, including banks and investment institutions. This low-net-worth and service-heavy model is affecting traditional financial firms, particularly commercial banks, and reforms in the traditional banking sector are imminent. [Sources: 2] 

    

AI offers financial institutions the opportunity to solve a wide range of common problems plaguing the industry and its customers, and they can team up to develop common solutions that benefit all, "the WEF said. FinTech companies strive to follow modern trends and provide the best possible services while keeping their heads and shoulders above water. [Sources: 8, 11] 

    

Modern customers demand more attention, special opportunities and better conditions at the same time. Accustomed to the standards of service set by consumers and Internet companies, customers today expect the same level of consistency, convenience, and personalization from their financial services providers. [Sources: 6, 8] 

    

By 2020, when consumers will need banking services, they will no longer turn to banks. Remember that banks are the biggest customers of FinTech companies, and this will help them reach new customers. [Sources: 1, 7] 

    

The digital nature of finance means that power has been taken away from the big banks and transferred directly to the people. All parties involved in bank transactions are involved and involved in the optimization of various financial services processes. Interactive financial transactions such as equity trading are withdrawn from the portfolio holder in several steps. [Sources: 2, 10] 

    

The financial services industry as a whole will consider banking technologies as a high priority for investment if they appear relevant to its business model. Talent will move from financial institutions to service providers. Such apps will suggest that routine banking roles such as bank clerks, service agents, loan officers and regulators are seen as ripe for automation and elimination. [Sources: 1, 9, 11] 

  ##### Sources #####

    

[0]: https://www.intechopen.com/online-first/ai-powered-virtual-assistants-in-the-realms-of-banking-and-financial-services

    

[1]: https://www.wowso.me/blog/technology-in-banking

    

[2]: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7306205/

    

[3]: https://link.springer.com/10.1007/978-981-33-6137-9_3

    

[4]: https://www.kelltontech.com/kellton-tech-blog/top-5-technology-trends-that-will-shape-fintech-sector-in-2021

    

[5]: https://internationalbanker.com/finance/the-impacts-and-challenges-of-artificial-intelligence-in-finance/

    

[6]: https://www.mckinsey.com/industries/financial-services/our-insights/reimagining-customer-engagement-for-the-ai-bank-of-the-future

    

[7]: https://www.pwc.com/gx/en/industries/financial-services/publications/financial-services-technology-2020-and-beyond-embracing-disruption.html

    

[8]: https://idapgroup.com/blog/artificial-intelligence-in-financial-services/

    

[9]: https://fastfuture.com/the-creative-and-destructive-impacts-of-ai-powered-fintech-on-financial-services/

    

[10]: https://www.forbes.com/sites/anniebrown/2021/06/15/meet-the-fintech-innovators-using-ai-to-reimagine-the-financial-sector/

    

[11]: https://internetofbusiness.com/how-ai-is-transforming-and-threatening-financial-services-wef-report-in-depth-analysis/