5 Ways the Artificial Intelligence Is Going To Improve Fintech In 2021

According to expectations, the pandemic outbreak caused a dramatic growth in the interest regarding cashless means of payment, and payment cards on smartphones and payments transferred by NFC modules, as well as, fintech industry companies’ services.

When a visit at the bank is impossible, and traditional financial institutions are not always prepared, to transfer their entire operations to the virtual world, a number of companies benefit, companies that have possessed such capabilities for long, and they have made them their distinctive features.

A significant role in this process is played by machine learning and advanced algorithms that are currently, collectively referred to as artificial intelligence. One may even risk a hypothesis that, without the popularisation of access to AI and ML, the current successes of companies in particular fintech branches would not be as impressive. Therefore, it is even more advisable to examine this aspect of their operations, on which artificial intelligence has made its mark the most.

5 Ways the Artificial Intelligence Is Going To Improve Fintech In 2021

1. Machine evaluation of creditworthiness

During the financial crisis of the 2007-2009 period, the entire world learned the painful consequences that may result from carelessness or even a clear lack of responsibility in creditworthiness evaluation.

Then, the entire American system failed, but it was ordinary human greed that played the key role in the catastrophe. Therefore, one should look at the machine evaluation of creditworthiness with enthusiasm, as it is based on machine learning and limits the potentially negative impact of the human factor.

Possibly, a situation, in which both ratings and criteria regarding access to financial products, will be estimated by machine means, based on databases from numerous years, may in the future minimise the risk of financial bubbles and other factors, that may cause a global financial crisis.

2. Proactive protection of internet transactions

Many fintech industry companies, already posses advanced mechanisms for the protection of transactions made via payment cards. Obviously, machine learning comes in to help, as it can, in a highly automated way, may monitor the payment method use profile, and then alarm on behaviour that is inconsistent with the model of behaviours formed on the basis of the previously gathered information. Importantly, contrary to traditional banking – there is no need for contact between a bank employee and a customer via telephone. All that must be done is to send a notification with a warning, so that the user may be notified of the alarm. Not only does it shorten reaction time, but it also reduces the number of false positives.

3. Fraud scheme detection

Fintechs introduce analogous security measures within the scope of account access protection, particularly security against phishing attempts. It will not be an exaggeration to state, that the mechanisms used currently, are not essentially different from how the greatest antivirus systems work. Therefore, a fintech industry company may actively manage a base of information regarding campaigns aimed against their customers, distribute signatures between client applications, as well as, actively co-create CVE vulnerability bases, by means of collaboration with companies specialising in cybersecurity protection. Additionally, fintech industry companies are at the forefront of innovation regarding certification protection, and for years have successfully been applying biometrics or multi-component certification.

4. Chatbots for customer service

The COVID-19 pandemic has demonstrated, that every moment, consumers may face enormous problems with access to products and services, that are primarily based on traditional, stationary contact channels with customers. However, on the other hand, technical support outsourcing may be quite costly. Therefore, many fintech companies chose an already highly popularised channel, which additionally stands out in terms of far-reaching automation – obviously, we are speaking of chatbots, which are currently advanced self-learning engines of natural language processing. Evolution in this aspect has taken place before our very eyes – just a few years ago, these programmes were limited with scenarios designed by their creators. Currently, each consecutive conversation with a customer is a base for self-improvement of evolution, due to artificial intelligence.

5. Predictive analytics

Another aspect, in which artificial intelligence is perfecting the tools available to us, is predictive analytics. It would be a certain oversight to reduce the scope of its impact on the fintech industry, as every enterprise make take advantage of machine learning supported predictive analytics. The advantage of fintech in this aspect is based solely on the wealth of the data gathered so far. When the data is used to recognise particular, repetitive patterns, it is possible to apply advanced algorithms to generate new products and services, as well as, forecasting trends in consumer behaviour and, in fact, their anticipation. As demonstrated, artificial intelligence opens entirely new possibilities for the financial industry.