There has been a great deal of interest in artificial intelligence (AI) for financial services recently—and for good reason. While it’s been a dream for decades, the ability to enable enterprise-grade AI was previously out of reach. Now, abundant compute and storage resources, flexible development protocols and tools, and varied and abundant data have created a perfect storm that promises to usher in a golden age of AI.
In some respects, an unfettered, gold rush mentality has taken hold as organizations find countless ways to deploy AI. While AI is making an impact across the full landscape of financial services, four areas are particularly well suited to adoption: algorithmic trading, fraud detection, credit approval and insurance underwriting, and customer experience and retention.
The simple-to-define but difficult-to-achieve goal of algo trading is to capture portfolio returns that beat the market. It’s no surprise that organizations are leveraging cutting-edge technology like AI to help maximize results. To do so, traders often turn to new, alternative data sources as inputs. Finding ways to unlock the value of this new data, as well as overcoming challenges with existing data, are a big focus. In many respects, AI is fast becoming table stakes for algo trading. Organizations that don’t embrace it face the prospect of diminishing returns.
Fraud detection has become more challenging as both the volume of data and the sophistication of bad actors have dramatically increased. Traditional methods generate too many false positives, overwhelming fraud teams, annoying customers, and generating little new insight. Deploying AI can assist in both cases, making teams more productive and revealing the tactics of increasingly sophisticated fraudsters. On the other side of the coin, bad actors are making use of AI themselves, creating an arms race where AI is a necessity.
Credit Approval and Insurance Underwriting
In today’s app-driven world, consumers expect instant or near-instant action. Fintech disruptors provide a level of service that is far more responsive than what incumbents have traditionally provided. AI can help meet this need for rapid response. It can also help drive insights organizations can use to create new features or products their consumers want. Successful adopters of AI are finding that they can reduce risk and loss while generating new revenue sources and competitive advantages.
Customer Experience and Retention
Like rapid credit decisions, consumers also expect lightning-quick service. And they’ll abandon their shopping cart if these expectations aren’t met. Loyalty is hard-won and easily lost. A focus on customer experience is essential. AI can provide insights on what customers want, as well as help support customer service teams with advanced tools. Further analysis can help reveal the best actions to take next and the right products and services to propel business forward.
Making the Most of AI in Financial Services
The adoption and maturation of AI is leading to dramatic changes and successful applications in many industries, particularly financial services. While these four areas are leading the way, the possibilities are endless.
In our white paper, “Can Artificial Intelligence Transform the Financial Services Industry?,” we delve deeper into these four areas. We look at where AI is having a big impact now and explore 10 challenges—and solutions to them.
Pure Storage enables enterprise-level AI success by redefining the storage experience and simplifying how people consume and interact with data.