How Banks can Leverage AI-Driven Financial Solution?

Banking CIO Outlook | Thursday, January 02, 2020

Banks are increasingly using AI to improve their investment decisions and maintain a healthy relationship with their clients.

FREMONT, CA:  Artificial intelligence (AI) is steadily encompassing the various verticals of the banking sector. This technology is remodeling the finance industry and contributing to the decision-making processes. Financial institutions are adopting AI to invest faster and smarter. Major banks, especially those involved in hedge funds, are using AI and ML to comprehend the market proceedings better and gain a decent return on investments. 

• Enhanced Predictability

AI is allowing bankers to assimilate new information more quickly and precisely into their portfolio creation processes. Further, improvement in computing power has also widened the expanded the horizon for financial institutions to collect and analyze data and develop sophisticated statistical models. The above capability will also impact future economic prediction enabling the banks to channelize their wealth better and to manage the risks associated with their portfolios.

• Rational Decision-Making Capability

Studies indicate that human investors are not rational. Almost all financial institutions are vulnerable to some human-behavioral bias. Irrational decisions due to such biases can severely impact the investment prospects for the banks. AI leverages disparate market-related data to arrive at conclusions, thereby minimizing the chance of any emotional bias and boosting the odds of higher returns on investments.

• Client-Advisor Connect

AI is enabling the financial advisors to automate numerous aspects of their relationship with the clients. For instance, most of the legal documentation, initial communication, as well as risk profiling, are getting automated. Moreover, the adoption of intelligent information management solutions simplifies the way information and documents are accessed, thereby boosting productivity with faster access to information.

• Affordable Financial Advisory

AI-driven insights and research efforts aid the financial advisors to come up with better advice to the clients at affordable costs. Such a capability can significantly enhance the investment results as the advice is coming after rigorous AI-powered market research that analyzes data from across the fields influencing the market.

AI is transforming the banking sector and has the potential to boost investment returns as well as offer a greater market perspective to the bankers.

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