Information About AI
Artificial Intelligence (AI) is an extended arm of Computer Science, which creates human-like intelligent machines that exhibit human traits like learning, problem-solving, and execution of tasks. AI is set to take center stage with a massive scale of innovations. Sundar Pichai, CEO at Alphabet, predicts that this decade will witness a paradigm shift from mobile-first to AI-first. The global AI market is expected to touch the $267 billion mark by 2027, a mere $27.23 billion last year. With a CAGR of 33.2%, AI has a tremendous potential to transform the future with its innovations. The AI Fin-tech market, exclusively, is projected to touch $22.6 billion by 2025 at a CAGR of 23.37%.
Artificial Intelligence and Machine Learning have various applications in Finance. AI is going to change the employment demand in banking, insurance, and other financial sectors. Besides, it will play a significant role in preventing fraud, enhancing productivity and efficiency, reducing errors, and improving quality. To survive in the market and attract customers and employees in the future, Accounting and Finance will have to incorporate AI in their systems. Despite the differences between Accounting and Finance, professionals in both sectors must adopt this revolutionary technology.
How Will AI Impact the Finance Industry?
- The existing manual system simply remodels the financial products with a few added features and benefits. However, AI-based fintech solutions will introduce brand new products and services.
- Chatbot has already taken over by providing automated services, and other functions which will undergo a massive transformation in Finance would be profit-generating avenues and business development.
- Risk-management becomes an easy task due to AI because AI generates accurate algorithms and precise future projections, which allow in arresting the risk involved in financial investments.
- AI will focus on having more customized product deliveries, enhancing the internal processes’ efficiency, and introducing robust security.
- The data management will be streamlined through automated services. The automation in the financial industry will also put a cap on the error of judgment caused by humans in the decision-making process.
- The AI will deliver accuracy in data management, which will result in better insights and analysis that will help with better financial decisions for both the policymakers as well as financial entities.
- The virtual assistants in the financial industry, which work similar to software like Alexa, will empower the end-users to educate, source, and decide upon the financial products that would best suit their financial requirements.
- Fraud detection will become an easier task with the AI’s automation aspect because Financial services have moved to the Internet of Things (IoT), which are prone to online hacking.
- Heavy reliance on AI-driven apps will reduce the burden on financial institutions, which will result in increased efficiency and reduced costs.
- The existing system of credit decisions is driven by humans and hence susceptible to biases leading to poor decision-making. This drawback will be eliminated because AI-based credit decisions will be data-driven that is fair to all the creditors alike.
Will AI Replace Humans?
The most pressing question in the Finance space is, will AI replace jobs in Finance? The answer is subjective as it depends on the multifaceted factors of AI and Finance. The strings of AI-based technology are tied to humans’ hands, which makes it impossible to cut out humans from the equation entirely. However, AI is definitely going to replace humans to carry out mundane tasks with more sophistication. So, the transformation in the financial space is certain, but humans and bots will work synergistically instead of anyone being removed from the equation.
AI-based transformation in the financial industry is inevitable; however, humans will continue being an essential part of the industry. This revolution may not ensure the survival of the fittest but the survival of those who embrace this change.