Financial platforms today enable users to access almost every financial service or product online from the convenience of their homes. The fintech revolution has been gaining momentum over the years, helping companies provide robust services and solutions to customers without the limitation of geographical distances.
While a lot of emerging technologies are playing a role in the evolution of the finance industry, the AI revolution is one of the most prominent. With that in mind, let us look at the ways AI is transforming financial platforms, starting with a brief overview of the role AI plays in financial services.
Understanding AI in financial services
AI is changing the landscape of the financial services sector, as in other industries. The integration of AI in the financial services industry extends to changes in how companies operate, customer interactions, agentic AI, and risk management.
The three core AI-related technologies that play an important role in the finance sector, are:
Natural language processing (NLP): The NLP aspect of AI helps companies understand and interpret human language, and is used for sentiment analysis or customer service automation through chatbots.
Machine learning (ML): AI can let financial systems learn from past data and improve performance with minimal human intervention. ML algorithms can analyse large data volumes and make important predictions about investment opportunities and market trends.
Predictive analytics: Businesses can use machine learning techniques and AI algorithms to identify the likelihood of certain outcomes based on historical data. Companies can use predictive analytics for better accuracy in fraud detection or risk assessment.
It also helps that AI has already been adopted to a certain extent in the financial sector. Around 70% of financial institutions and companies currently invest in AI technologies, according to a 2024 report by Gartner. Moreover, around 58% of finance functions use AI in some capacity.
AI-integrated strategies in finance
For AI integration in the finance sector to be truly successful and unlock the untapped potential in a company, strategies using the technology must be well-defined. With robust strategies, finance companies, and service providers can ensure AI prepares them for a more profitable future.
Among other areas, three important areas of or strategies for financial services that currently use AI at a much bigger scale, are:
Risk management
While risk management is an essential business function in many companies and industries, it is especially important for financial institutions. With the help of advanced algorithms and data analytics, financial organisations can take a proactive approach to identifying, assessing, and mitigating risks. As a result, you can avoid issues like leakage of revenue or loss of important data.
AI models can help with credit risk assessment of businesses and individuals by analysing large datasets. Financial companies can also use AI-based systems to monitor transactions in real-time and identify unusual patterns pointing to fraudulent activity. Additionally, financial analysts use AI to conduct market risk analysis and predict market volatility by processing extensive market data.
Compliance and regulatory monitoring
As the financial industry faces increasing regulatory scrutiny, organisations have to invest and implement robust strategies for compliance management. AI systems can help organisations automate the checking of transactions for compliance with anti-money laundering laws, and flag down suspicious activity.
Many financial service providers are developing AI-driven risk assessment frameworks that help them identify and prevent compliance risks. Plus, they also use AI to streamline reporting processes to ensure timely submission of regulatory documents and the generation of compliance reports. Lastly, processes must align with the necessary AI regulations.
Personalisation of communication and products/services
AI can also help financial organisations provide highly-personalised services to customers by analysing their preferences and requirements. By using data analytics, banks and financial organisations can provide tailored financial products that meet their specific needs. AI-powered chatbots and virtual assistants help customers get instant support and answers to queries in real-time.
Financial companies should conduct continuous and consistent analysis of transactions and customer interactions to identify robust trends and deliver targeted and highly relevant marketing and promotional messages to customers.
AI-powered tools on financial platforms
The aforementioned strategies help financial companies provide unique and high-quality services to customers. Most financial platforms offer different kinds of AI-powered tools that add several value-adding features and abilities.
Here are some of the AI-powered financial tools to know about:
AI chatbots and virtual assistants
The quality of customer service is important to the success of any financial institution or organisation. Most financial companies use AI-powered chatbots and virtual assistants to provide excellent service to customers. Chatbots can ensure timely communication, helping companies humanise AI responses, and resolve queries for customers.
Enterprise AI agents
For larger financial organisations that offer multiple services, products or operate in many locations, an enterprise management strategy is a must. A lot of companies implement enterprise AI agent platforms that help automate repetitive actions and tasks when an event or feature is triggered.
Fraud detection system
Most financial platforms use a fraud detection system to monitor transactions in real-time and flag any suspicious instances to combat fraud. The systems also help companies monitor market conditions and user behaviour to detect any unusual patterns immediately.
Data mining tools
Most financial platforms handle large volumes of financial data that can be analysed and monitored to generate valuable insights. Data mining tools can help navigate this situation by extracting insights from large data volumes with the help of machine learning algorithms. It is possible to identify patterns and trends to inform strategic and financial decisions.
Automated trading systems
AI-powered automated trading systems help companies execute trades based on predetermined criteria. Automated trading systems aid financial organisations enhance efficiency in trades and react to market changes faster than humans.
The future of AI in financial systems and services
As the financial services industry evolves, so do the role and applications of AI in the industry. Companies should keep track of emerging trends to steer the success of financial service provision.
When integrating AI technologies into financial processes, it is important for companies to choose the right platforms to ensure smooth and efficient implementation. This brings us to a comparison of Sitecore vs. WordPress – two web platforms popular in the financial services space.
While Sitecore offers a highly personalised experience for customers, making it ideal for large financial institutions with complex needs, WordPress provides an affordable and scalable solution for smaller institutions or those just beginning their AI integration journey. Understanding the strengths and limitations of each platform can help financial organisations choose the best way to adopt AI solutions.
Some industry solutions include personalised financial services tailored to the preferences and risk appetite of customers, and decentralised finance solutions that could automate lending, borrowing and trading decisions effectively.
Many financial companies are looking to implement advanced risk management tools that use AI to assess risks and predict market disruptions proactively.
The integration of AI in financial processes may be slow but it is inexorable, making it important for companies to consider implementing the technology sooner rather than later. With effective AI integration, financial companies can enjoy better operational efficiency and enhanced customer experience in the long-term.
Conclusion
The role of AI in the financial industry has been discussed and debated for some time. While most financial applications and platforms use AI to strengthen or automate certain processes, others use it to add new functions and features to the existing platform.
(Image source: Unsplash)