Artificial Intelligence for Financial Services

While Artificial Intelligence (AI) can be useful in many ways, the most obvious application of AI is to manage and optimize financial services. A prime role for AI is to automate the process of gathering financial data, such as account balances, client information, and performance history, a crucial part of financial analysis, which has led to the development of automated investment management (AIM) models that process more than half of the total annual financial data. An automated portfolio that employs AI-based techniques can better optimize an investment for risk tolerance and individual risk outlook, allowing investors to achieve their investment goals without the need for a human to interpret complex results. Moreover, AI can be used to analyze financial information from external sources, like stock charts and interest rate quotes. These external sources of information offer additional insights that can help a financial advisor make better investment decisions based on their understanding of the market’s underlying dynamics. Furthermore, AI offers insights that can improve a financial advisor’s ability to develop better investment strategies to meet specific investment goals. The development of AI-based financial planning software that can automatically analyze financial data in real-time can offer additional knowledge that can improve investing decisions. For example, AI financial advisor can help an investor to determine their optimal portfolio allocation, whether that portfolio is a fixed, floating, or indexed portfolio, and how much risk would be suitable for an investment objective. Artificial Intelligence also provides a full suite of investment management-like portfolio planning tools.

By harnessing the power of AI the right way financial services firms can add the right piece of information detection and analysis functionality without risking in the pursuit of better-performing Artificial Intelligence tools. The current financial crisis has shown some of the weaknesses that arise when companies over-expose themselves to a technology in their investment platform space.
Many leading financial services companies, including Goldman Sachs and JPMorgan, have already been working independently to develop and apply a suite of Artificial Intelligence (AI) systems that can support “financial service provider” (FSP) roles and functions and deliver the potential benefits. The financial services industry has benefited from such adoption by integrating AI into the financial ecosystem by providing financial tools, including the trading of financial assets, using AI to detect anomalies and deal with errors faster. Reducing human errors by automating processes and automating risk management processes with AI, improving productivity and efficiencies. Advancing human judgment by reducing false or erroneous inputs, and reducing the number of transactions errors and reductions in transaction value. And although financial services giants are working to increase customer engagement through technological advances in AI. A recent example JPMorgan (JPM) has created a robo-adviser “You Invest”.

Industry research shows that the leading use of AI at the data center is in the financial industry. AI in financial services can be seen as a natural move to help financial industry to maintain financial efficiency, as a result of being more agile and responsive. Financial technology experts can combine a strong understanding of the financial services sector and apply it to the benefits of AI in the global adoption of financial products using the financial sector as the starting point.