Compared to other industries, the finance industry jumped quickly into artificial intelligence. The most prominent use case for AI is in fraud and anomaly detection. When fraud occurs, financial firms end up covering the impacted victims. In addition to having to manage funds lost through fraud, financial institutions often find themselves tangled in a variety of other issues pertaining to the loss of reputation. Through the use of machine learning's innate ability to spot anomalies, the use of AI is greatly helping to detect fraud.
Artificial Intelligence provides a faster, more accurate assessment of a potential borrower, at less cost, and accounts for a wider variety of factors, which leads to a better-informed decision. Credit scoring provided by AI is based on more complex and sophisticated rules compared to those used in traditional credit scoring systems.
AI is especially effective at preventing credit card fraud, which has been growing exponentially in recent years due to the increase of e-commerce and online transactions. Fraud detection systems analyze clients’ behavior, location, and buying habits and trigger a security mechanism when something seems out of order and contradicts the established spending pattern.
AI powers the smart chatbots that provide clients with comprehensive self-help solutions while reducing the call-centers’ workload. Voice-controlled virtual assistants powered by smart tech like Amazon’s Alexa are also gaining traction fast, which is no surprise: boasting a self-education feature, they get smarter every day, so you should expect tremendous improvements here. Both tools can check balances, schedule payments, look up account activity and more.