Technology and finance have always been happy bedfellows and the repetitive nature of many financial tasks has lent itself to technological solutions. There are numerous areas in which they work well together – from everyday spreadsheets for accounting through to trading platforms that execute thousands of transactions per minute. But what are the current technologies that are likely to transform finance going forward?
Artificial Intelligence (AI) in finance
Artificial Intelligence has numerous potential applications in the financial sector. Many organisations are already using it in central parts of their business. The main areas in which AI will continue to transform finance are financial advice, customer service, fraud detection/prevention, trading, and online banking.
Financial advice
Robo-advisers are software products that are aimed at managing investments and are being mooted as possible replacements of the traditional Independent Financial Adviser. Based upon some initial questions, they can automatically select investments, build a portfolio and automatically makes changes when needed. They avoid emotional investment decisions, cost less than IFAs, and reduce stress.
Customer service
Chatbots are fast becoming the norm when it comes to customer service and this is likely to continue and spread through the financial sector. This AI driven technology is able to evolve and get smarter as well as being available 24/7, thus providing instant interaction for customers. It is likely that chatbots will replace traditional CS teams entirely in the not-to-distant future.
Fraud detection
AI is progressing quickly in this field and machines are now able to detect fraud at early stages that humans may miss. They can use financial histories to calculate and predict the likelihood of fraud and pick up on unusual transactions as soon as they happen.
Trading
The trading world is continuing its transformation from analogue to digital. Improved analytical tools are enabling more accurate trend predictions and faster trading, and AI systems are able to learn as they go (picking up new patterns, avoiding previous mistakes etc.)
Online banking
Online banking is becoming increasingly sophisticated on a daily basis – and is being used by millions worldwide. Money can be transferred with the click of a mouse/push of a button and bank accounts can be accessed on phones, computers, or tablets.
Data gathering/use
As people and the devices they use become more advanced, more data (in particular real-time data) is being generated and at a faster rate. Ever more intelligent software is being used to process this data for numerous purposes. For example, when assessing credit-worthiness, data from social networking platforms is being used by some to aid in the decisions.
Meanwhile, insurers are using more complex data and algorithms in order to assess risk and make policy decisions. An increase in wearable/smart tech is helping consumers to make informed decisions on things such as driving safely and exercising more (and these devices also provide valuable lifestyle data).
The pace of innovation and the challenges faced by today’s management and recruitment teams may be unparalleled, but so are the opportunities. If, like many organisations at present, you are struggling to fill your senior digital management positions, why not contact our industry-leading and experienced team here at Clifford Associates to see how we can help?
