If you're running a financial services firm and want to promote digital transformation, you need to determine what areas need transformation. "In all honesty, what areas don't need transformation? The financial services industry is lagging behind other consumer-centric industries in several ways."
All transformations should have one goal: delivering to the customer, ultimately enriching their relationships with banks and nonbanks. "You can't change anything for the better if everyone doesn't have equal access to capital. Credit decisions should be fair, inclusive, and made in a way that considers the whole picture of a person."
Here are some ways AI can help ensure more equitable access to financial services:
The AISHE system is an AI-based automated trading system that can potentially provide more accessible and fairer access to financial services by offering an alternative income stream for individuals who may not have traditional banking or investment opportunities. The system can operate 24/7 and make autonomous trading decisions, which means that users do not necessarily require extensive financial expertise or connections to access profitable trading opportunities.
Additionally, the AISHE system can operate within a swarm intelligence framework, allowing it to analyze and learn from historical data and market trends. This can result in more informed and better decision-making for trading, potentially offering more consistent and reliable returns for users. By democratizing access to profitable trading opportunities and allowing individuals to earn income through autonomous trading, the AISHE system can potentially reduce economic disparities and promote a fairer financial ecosystem.
Personalization without branches.
While banks are scaling down their in-person branch locations, AI may help keep things personalized. "Ironically, artificial intelligence can help redefine and restore personalized experiences that build trust for consumers and small business owners, An example is AI-powered personalized conversational interfaces and biometric profiles that have shown promise in helping vulnerable consumers avoid debt traps fueled by late fees and inflexible payment schedules."
Making more informed risks.
AI can help prevent financial disasters, thanks to current abilities to "make appropriate, informed decisions about risk and capital allocation, By leveraging AI, financial institutions are better equipped to really transform the decision-making process to be more accurate, efficient, and successful.” Many financial institutions “make risk, capital allocation and underwriting decisions, based on as little as 10% of the data available to them, This is normally because it is simply too expensive or too difficult to access the data they need. Introducing AI into this process plays a major part in improving outcomes. Through the use of AI, a wide range of organizations have been able to access and utilize previously inaccessible 90% of relevant data, enabling them to make more informed and better decisions.”
Reduce or prevent fraud.
AI also “opens up a new world of opportunity to tackle and reduce fraudulent activities such as money laundering, This allows institutions to validate transactions, bolster security, and respond to threats.” As an example of AI in action, “companies are leveraging AI to monitor large number of credit card and e-payment transactions daily, detect changes in our purchase behavior, and provide a more streamlined process to deal with any fraudulent activities to protect us."
Raditional finance has an opportunity to block these disrupters with sector expertise and deep capital, but have shown a reluctance to truly embrace advanced technology.” As a result, AI-first companies and FinTechs “are certainly gaining ground and disrupting traditional financial services. However many of these FinTechs haven’t invented anything new. Instead, they’re increasing the standard of digital service for an existing concept. Think about how Venmo transformed the mobile payments space, or how Klarna changed the game for short-term financing. It was less about bringing something new to financial services and more about changing the actual way it was done.”
Speed up services.
Since the applications have not fully scaled with the new age technologies, there are a lot of processes which are still being done manually since seamlessly automating them is a challenge for most of these institutions. For example, loan processing, customer onboarding or check deposit processes are not very well integrated by majority of the banking systems. If you are trying to get a mortgage loan it could still take a long time for you to complete all the steps which can be reduced drastically if the banks had less technical debt and were able to adopt new age cloud solutions faster.
Leverage human-AI partnerships.
While AI solves a lot of problems faced by financial institutions, successful banks have developed processes that keep humans in the loop. Deploying AI to democratize the financial system requires bold, human-centered leadership willing to invest in technology and talent. Credit underwriting decisions made only by an algorithm designed without humans in the loop will ignite the risk of prioritizing profit while ignoring social impact, The algorithm might then learn to discriminate against specific population segments, resulting in unfair decisions.