Artificial intelligence as a driver of financial market transformation

From barter to fiat currency, from plastic cards to contactless payments, the world of finance has come a long way. Today, artificial intelligence has intervened in the process of its development. AI promises to open up barrier-free payments in different industries, segments, spheres of life. How will these changes be manifested?

Research institutes, corporations, educational institutions and even governments strive to become the leader in AI development. AI-powered fintech startups — Upstart, Icertis, Circle — are showing exponential growth, as well as the venture funding for them. This is because such technologies lead to automation, decentralization and data-driven forecasting.

Artificial intelligence and fintech

The banking, financial services, and insurance industry are already convinced of the effectiveness of AI in processing huge amounts of data and providing information through pattern recognition. AI has changed the world of payments and financial services, which is constantly fighting fraud. AI is faster at detecting fraudulent transactions in the digital world, where PII (personal information) is available for several hundred dollars. Advanced risk monitoring allows you to predict and respond in real-time, not post factum.

Artificial intelligence also promises to open up a world of seamless payments, where modern POS terminals will look archaic. Amazon’s experiments to eliminate checkout lines are a good example. Amazon opened a supermarket without cashiers and self-checkouts. The company uses hundreds of overhead cameras and electronic sensors to identify each customer and track selected items.

Purchases are invoiced to customers’ cards when they leave the store. You just need to have a smartphone with the Amazon Go app installed. Shelf sensors add items to an Amazon Go account when customers pick them up from the shelf, and remove items when they put them back in. Upon exit, an electronic receipt is issued.

Digitization and decentralization are at the heart of the AI-powered fintech revolution. In addition to artificial intelligence, there are blockchain, robotic process automation and data analytics. Mordor Intelligence predicts that the market for fintech technologies in the field of AI will be more than $22 billion, and by 2025 it will grow by an average of 23%. Financial leaders around the world recognize the role of technology led by blockchain and AI. Probably, the Asia-Pacific region will be the fastest-growing in the field.

Artificial intelligence and investment

The investment market is also changing. For example, robotic consultants have appeared. AI-powered investing is effective because of the ability to go beyond the power of algorithms and take into account much more complex parameters, including several factors, from the tax-loss harvesting to financial planning.

AI applications include predicting consumer behavior and enabling efficient purchases of personalized products. This opens up tremendous opportunities for users of financial services. Controlling and managing financial risks are the most important early applications of artificial intelligence. This helps rebuild trust in the system and enable digital finance integration.

Artificial intelligence advances the boundaries of volume and speed. These are technologies that intend to make not only fintech but also other areas of our life much more efficient. It is too early to judge the reality of the set goals, but the growth of companies and investments indicates positive trends.

Генеральный директор ФК "Леогейминг Пей" Основатель компании LeoGaming