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07/07/2023

Artificial Intelligence (AI) in the Financial Sector: Discover the Opportunities and Challenges

A financial institution deals with numerous daily operations. Therefore, it is more challenging to manually analyze each one to identify any deviations from operational standards that may indicate fraud. However, Artificial Intelligence (AI) performs this task more efficiently to optimize business operations.

Are you interested in this benefit? This is just one of the advantages offered by AI in the financial sector. Every now and then, this technology gains popularity. For example, have you heard of GPT chat? It has been increasingly discussed as a natural language processing tool driven by AI.

So, do you want to learn more about the opportunities and challenges offered by AI in the financial sector? Keep reading and stay informed!

What are the opportunities of AI in the financial sector?

This technology enhances the effects that traditional approaches in the financial sector could provide. Learn more about the opportunities it brings to the industry!

Credit scoring accuracy

Does your financial institution provide credit to individuals and/or businesses? Traditionally, this process involves interviewing the applicants. By leveraging Artificial Intelligence, the technology evaluates various data, such as income, credit and transaction history, savings, demographic data, and more.

All of this leads to a result that determines whether the credit applicants qualify or not. This AI-assisted processing occurs faster and with greater accuracy. Furthermore, decisions made by this resource are more impartial. Humans can make decisions based on unconscious biases, such as prejudices and stereotypes.

Fraud prevention

As mentioned, the agility in identifying errors and other actions in the financial sector can help prevent fraud. In recent years, fraud has become even more common, with half of Brazilians falling victim to these scams in e-commerce, according to Nielsen data.

Traditional financial institutions combat fraud with hardcoded rules, which can be discovered by fraudsters. In the case of AI, the rules evolve over time and can adapt to circumstances.

Personalization of banking experience

Personalization in the financial sector can enhance user satisfaction. AI can achieve this goal through chatbots, for example, which understand human intent and effectively respond to some general questions. This streamlines and simplifies customer service, assisting with tasks such as password changes, scheduling bank payments, and more.

What are the challenges of AI in the financial sector?

Just as there are opportunities in the financial sector with Artificial Intelligence, there are also challenges. Some of these challenges include:

  • Data quality – corrupted data and erroneous analyses due to algorithmic errors can lead to incorrect interpretations;
  • Biased data – it is necessary to remove any sources of unconscious biases in the data to avoid affecting decision-making;
  • Black box – algorithmic decisions must be fully aligned with the particularities of the financial sector;
  • And more.

So, do you understand the role of AI in the financial sector? As seen, this technology brings various opportunities and challenges to financial institutions. To overcome these challenges and provide a better experience, it is important to ensure high-quality analytics work for the algorithms.

Artycs can help your financial institution achieve this goal. Visit the website to learn more about the offered differentiators!

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