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Friday, July 19, 2024

What impact will AI have on FinTech in 2023?

Artificial intelligence (AI) is emerging as one of the key driving forces behind financial technology, as in many other industries recently. It’s a defining trend in marketing, motoring and manufacturing, and it’s set to reshape the financial sector over the coming years.

FinTech has already been instrumental in reforming the financial services industry, with digital banking, investment and payment systems now a staple of daily life for millions across the world. But how will AI continue to advance this area in 2023?

AI is increasingly used in customer service applications, with chatbot features helping customers to find the information they’re looking for online. This reduces the need for human operators, saving FinTech companies money and helping customers access support at any time of the day.

Algorithms harnessing the power of AI are also helping to analyse mass customer data sets to provide more tailored offerings and services to specific customers. Customisation helps to enhance customer experiences which can drive loyalty to particular products and services.

Hacking, fraud and scams have been common threats to FinTech companies and customers alike, but AI is bolstering security significantly. The technology is used to spot suspicious financial activity and fraudulent transactions in real time, protecting customers and businesses from loss.

On backend systems, AI can scan data sets and coding for cyber threats to protect financial institutions from hacking. Cybersecurity is now a huge industry and it has a large role to play along with AI in protecting financial companies. FinTech law firms are well placed to advise organisations on these often-complex matters.

AI is also helping to streamline and inform decision making in financial settings. This can be seen in investment strategies and financial management, where human error all too often costs companies significantly. Machine learning capabilities will continue to improve over time as more data is collected, meaning that analytical models and forecasting are only set to get more effective.

Decision making can also be improved in terms of customer analysis and risk assessments. Credit and lending processes now take a fraction of the time and risk can be evaluated much more accurately with massive data sets and trends. For banks and financial institutions, this reduces costs and increases yields with fewer risky investments.

AI has been integrating into the FinTech space gradually in recent years, and this will continue heading further through 2023. It should be creating more opportunities for user experience improvements, security reinforcements and better decision making with the use of advanced data and analysis methods.

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