Artificial intelligence (AI) is the science of making machines think like humans and do things that are considered smart. AI achieves this by recognising patterns and making decisions and judgements just like humans.
Experts in Fintech and finance agree that from 2024 and beyond, AI can impact every aspect of business, whether it be improving the customer experience or streamlining operations. AI technology can process large amounts of data in ways unlike humans.
AI is transforming the financial industry by increasing the speed, accuracy, and efficiency of financial services. AI technologies are being used to create innovative solutions that improve customer experiences, lower costs, and drive growth.
In recent times, fintech business models largely revolve around maximising diverse AI technologies for a range of applications. This includes computer vision models for interpreting various types of primary data, market dynamics, and processing tax records, among others.
Strategically deployed, AI can be the primary tool to increase productivity within an organisation’s operations to deliver business efficiencies that also enable Fintech to focus more on its customer engagement.
Indeed, it would be safe to say that in today’s business world AI is used across all aspects of operations, and its proper deployment will be key to reducing risk, waste and cost in an increasingly competitive environment.
Recent technological advancements have intensified AI’s prominence. The global AI market, valued at US$136.55billion in 2022, is projected to grow at a compound annual growth rate (CAGR) of 37.3 percent from 2023 to 2030 – substantiating its importance.
In 2024, fintech companies should leverage AI to enhance the customer experience and streamline financial processes. In practical terms, AI-powered chatbots and virtual assistants can be deployed to provide real-time, personalised assistance, thus addressing customer queries efficiently. By harnessing natural language processing and machine learning, Fintechs can offer instant and accurate responses, contributing to a seamless and user-friendly experience. This not only improves customer satisfaction, but also allows human resources to focus on more complex issues.
At eTranzact Ghana, AI has become the cornerstone of all operations. Fintechs that are serious about maximising the benefits of AI technologies must follow suit by developing a business model that integrates AI-generated data and tools in the products and services they offer.
AI’s role in our business is foundational, influencing every aspect of what we do and enabling us to provide advanced, efficient services to the Fintech industry.
AI for Fintech good
Initial discussions on AI’s potential in financial services were positive, focusing on its substantial impact on fraud detection, revenue forecasting accuracy, informed lending decisions and credit risk management. There was a palpable buzz about data quality, security and compliance, together with cost savings of US$7billion per year for banks with the introduction of chatbots.
The financial industry relies heavily on data analysis. AI technologies are being used to process large volumes of data for better decision-making to automate key processes and deliver personalised experiences for clients. This knowledge can be applied to better product development, better customer experiences and risk management strategies, and provide financial institutions with valuable insights into customer behaviour, market trends and investment opportunities.
One of the most difficult challenges that the financial industry faces is fraud detection. Traditional methods of fraud detection rely on time-consuming and error-prone manual reviews and rule-based systems.
AI technologies, such as machine learning and natural language processing, are being used to create more effective fraud detection solutions. These technologies are capable of analysing massive amounts of data in real time, detecting fraudulent transactions and preventing financial losses.
The financial industry is based on providing excellent customer service. Artificial intelligence is playing an important role in improving customer experiences. AI-powered chatbots and virtual assistants can answer customer questions and make personalised recommendations 24 hours a day, seven days a week – improving customer satisfaction and lowering costs for financial institutions.
Data, statistical algorithms and machine learning techniques are used in predictive analytics to determine the likelihood of future outcomes based on historical data. Predictive analytics is used in the financial industry to forecast market trends, customer behaviour and investment opportunities.
Innovative business models
Artificial intelligence is enabling financial institutions to create new business models. Robo-advisors, for example, are AI-powered investment platforms that offer customers personalised financial advice and investment recommendations. AI is also being used by peer-to-peer lending platforms to assess credit risk and match borrowers with lenders.
In conclusion, AI is not altering goals – but it’s accelerating the journey to get there. While there are some challenges to AI adoption, such as job disruption and data privacy concerns, the benefits of AI are substantial.
Financial institutions can improve customer service, risk management and the development of new business models by leveraging AI technologies. AI is becoming increasingly important in the future of Fintech, and financial institutions that embrace this technology are more likely to succeed in the long run.
The writer is Chief Executive Officer, -eTranzact Ghana Limited – a leading financial technology entity.