As the financial services industry continues to evolve, artificial intelligence (AI) is emerging as a key technology for banks and other financial institutions. According to a recent research report by Business Insider Intelligence, AI has the potential to generate significant cost savings for banks, with an estimated aggregate potential of $447 billion by 2023.
In this blog, we will explore the ways in which banks and other financial services can leverage AI to optimize their operations and deliver better services to their customers.
From fraud detection to customer service, we will delve into the various applications of AI in the financial services industry and examine how these technologies can help financial institutions stay ahead of the curve. So, let's dive in and explore the exciting possibilities of AI in finance.
Analyzing User Behavior
Banks provide a range of credit card options to cater to diverse customer needs, from lifestyle and entertainment to travel and other specific preferences. However, selecting the most suitable credit card for a particular customer can be a challenging task for banks.
Fortunately, machine learning algorithms offer a solution by analyzing customer spending data to recommend the ideal credit card for each customer. For instance, if a customer frequently spends on travel-related expenses, the algorithm can predict that a travel-focused credit card with rewards such as airline miles or hotel points would be the best fit.
By utilizing this technology, banks can enhance their customer experience.
A Bird’s Eye View Of The World
Commodity trading is one field where AI and ML are already making a significant impact. By analyzing weather patterns and other indicators using satellites, these technologies can predict commodity prices with a high degree of accuracy. This is particularly useful for traders who are looking for an edge in the market.
It is no news that traditional sentiment models give a simple score, but there is often a great deal of subjectivity involved. For example, a higher import duty on metal may be bad news for the company but good news for a local manufacturer.
By incorporating user type into the model, one gains a more nuanced understanding of how different pieces of news may affect different types of companies.
Moreover, investors are increasingly recognizing that Environmental Social and Corporate Governance or ESG factors have the potential to impact a company's long-term performance, making it an important consideration when making investment decisions.
By using ML to automate the tagging process, asset managers can stay informed about important ESG-related developments without the need for manual analysis. Additionally, asset managers can make more informed investment decisions that align with their clients' values and goals.
Finally, AI and ML can be used to develop global macro strategies. These are hedge fund investment strategies that are based on the overall economic and political views of various countries.
By tracking more than 200 macroeconomic indicators and geopolitical developments using Decimal Point Analytics’s EcoPulse and FundPulse for fund tracking, investors can identify trading signals and create baskets of mutual funds to implement these strategies.
Streamlining Financial Professionals' Work: The Role of Technology
AI & ML are revolutionizing the way financial professionals work, making their jobs easier and more efficient. Insurance Contract Processing is an area where NLP-based techniques can be used to automate contract analysis. This includes identifying key clauses, risks, and obligations, thus improving the overall contract management process. With the increasing volume of contracts and legal documents, automating the process can lead to significant savings in time and effort.
Professionals dealing with Merger & Acquisition (M&A) deals are a significant aspect of the corporate world. These deals can impact the growth and profitability of companies, as well as the overall economy.
By using machine learning algorithms, analysts can predict the probability of a successful M&A deal and identify potential risks that could affect the outcome. This can help investors make more informed decisions and reduce the risk of financial losses.
Role of Decimal in AI-Enabled BFSI Sector
Decimal Point Analytics is a team that collaborates closely with banks and other financial services to offer a deeper understanding of the finance world. One of the critical areas they focus on is determining the financial health of companies, which has become more important than ever for asset managers and investors today.
To achieve this, Decimal Point Analytics has developed CreditPulse an ML-based software that predicts bankruptcy before it actually happens. The software assigns a credit score to companies based on textual analysis of the MDA section obtained from annual and quarterly filings.
CreditPulse is a valuable tool for investors and asset managers who need to assess the creditworthiness of companies in their portfolio.
Another area where Decimal Point Analytics is making a significant impact in the finance world is document analysis. Using computer vision techniques such as DocAI, Equity Analysts can extract tables, figures, images, charts, text, and other valuable information from documents, making the process faster and more efficient
The use of AI and machine learning is transforming the finance industry, and Decimal Point Analytics is at the forefront of this revolution. By leveraging the latest technology, the DPA team is empowering financial professionals to analyze global economic developments and automate document analysis processes.
These tools are enabling asset managers and investors to make more informed decisions while freeing up time to focus on higher-level tasks that require human intuition and expertise. With this approach, the finance industry can achieve greater efficiency and productivity while mitigating risk and ensuring long-term success.
As the finance industry continues to evolve and adapt to new challenges, Decimal Point Analytics is poised to be a key player in driving innovation and progress. With our expertise and cutting-edge technology, we are well-positioned to help financial professionals navigate the complexities of today's landscape and achieve their goals.
Contact Decimal Point Analytics to know more about financial solutions.
