Not all results of technology adoption are intended or even anticipated; the adoption of AI and other technologies in asset management creates a wave of information potential throughout the entire industry.
For one thing, we can’t talk about AI and finance in 2021 without mentioning blockchain and cryptocurrencies. As blockchain is becoming more mainstream and secure, there has been a push for a more democratized financial market. Asset managers can play a big part in diversifying their client portfolios as this shift builds momentum, but they should also advise clients to be wary of volatile investments like crypto.
What’s more, when it comes to trading, AI algorithms can be taught to identify certain indicators that trigger an automatic trade at an optimum time. And while the regulations for using AI in asset management are not as stringent as they are in other industries, there is a push for increased oversight of such services.
Algorithmic trading using financial models has a rich multi-decade history, and artificial intelligence (AI) is the new emerging trend in the asset management landscape. AI is a mixed bag of tricks including machine learning, deep learning, conversational interactive systems, and various other “bot” technologies. And the investment landscape is also being affected by AI- after all, AI can read and understand billions of pieces of data, which means one can spot trends better with its aid. It will help investors, portfolio managers, sovereign wealth funds (SWFs), and other financial institutions to predict future prices more accurately and without the burden of emotional investing. AI-driven asset management will shift the capital of investors in emerging markets from traditional approaches to these lower-cost, more diversified, and higher return investment vehicles.
“Technologies like machine learning and AI are changing the way that we do many things, including asset management, investing, trading, intelligent financial assistance, fraud detection, and managing money.”
Here are three ways that we believe AI is transforming the asset management landscape- expect disruption, growth, and above all, smarter investment portfolios:
Increasing Security and Preventing Fraud
Indeed, technologies bring in high-level convenience, allowing us to make payments in just a few clicks. But unfortunately, this trend opens up a whole new host of security issues. Fraudsters get a fair chance to commit criminal activities. While such a situation will leave customers hugely disappointed, companies will also have to face financial losses. Did you know, as per the report from LexisNexis, “every dollar of fraud costs organizations nearly 2 ½ times more than the actual loss itself?”
Fortunately, AI can solve this issue. We live in a data-driven world. Each minute, each second, data is generated. Data, if interpreted correctly, can uncover potential insights into how fraudsters carry out illegal activities. Also, data can find whether a user is trying to abuse the network or not. Fintechs can collect relevant data, build AI tools, and develop robust security systems. More the data, the more the accuracy of the result that the AI tool gives. The fintech firms can collect more relevant data to make the AI tool smarter and intelligent, and give better decisions on security issues.
Helping More Customers with Smart Chatbots
With customer expectations going sky high, there is a need for a platform that offers highly customized, quick, and secure solutions. How about having a personal virtual assistant, that is just one message away from us offering the required financial assistance? Chatbots can fulfill this demand!
Chatbots, a messaging platform, is programmed to answer questions asked by customers in real-time, around the clock. This sophisticated platform can be designed to carry out different roles, ranging from financial advisor to that of investment manager. Customers can also interact with a chatbot and ask it to make a monetary transaction, without even downloading a mobile app. With chatbots, fintech companies can enable high-level customer satisfaction, reduce labor costs, and also eliminate human errors.
Also, imagine we are looking out for the best investment plan. Probably, our first move would be asking our family or friends. And to be sure, we would take suggestions from an investment expert. However, affording an advisor might be difficult for the not-so-wealthy people. But, this situation will no longer persist. Why, you ask? Because we have chatbots acting as our advisors! By gauging customer’s financial profiles and goals, chatbots can suggest the best plan for the customer.
Providing a Competitive Edge with Intelligent Process Automation
Fintech firms are increasingly escalating the pace of revolution with the help of cutting-edge technologies. They are now looking to combine two incredible technologies to become a differentiator in the competitive market. Robotic process automation (RPA) and AI have become disruptive forces in the fintech sector. Augmenting AI to a rule-based robotic process automation system gives rise to another tool that not only automates tasks but also possesses decision-making capabilities. Yes, you guessed it right. It is Intelligent Process Automation. This newly-born tool is expected to add 512 billion dollars to the finance sector, as revealed in the report from Capgemini Digital Transformation Institute.
In today’s high-paced technology-driven world, fintech is surpassing its competitors by following the new-age trends that have arisen because of advanced technologies. While these firms have successfully managed to satisfy today’s new generation and their needs, their demands for more convenience and ease will never end. The groundbreaking technology comes as a life-saver for these firms. Even though leveraging AI will take immense efforts and might eat a lot of money, it will stand poised to revolutionize financial services, operate smartly, and make better decisions with time. Most of all, investing in AI for fintech will bring in handsome ROI, mind you!