Machine Learning in Fintech: Changing Financial Services

Language recognition beats new records steadily, and data analysis allows to convert these advancements into a brand new experience for each client every time they use the service. We have already covered chatbots and their role in one’s business in our blog. Check this out, if you feel like adding an AI assistant to your weapons locker.

Moving beyond customer support for a product, meet Clark, a robo-advisor. This German startup is an advisor platform that offers knowledge on insurance and other related issues, with the list being updated continuously. TechCrunch has already covered it’s $29 mln Series B funding. All the clients have to do is ask. And Clark will come up with a solution (that is within his field of operations, obviously).

Making marketing simpler through machine learning

Analytics has always been a crucial part of any marketing campaign. AI and machine learning take that to the next level. There is a countless number of data to take into account while pulling off a successful marketing effort.

Visit times, ROI, behavioral patterns on website or apps, purchase preferences, age/gender influence on purchasing activity within the niche and so much more. It used to take a ton of manual micro-management and analysis. Today, machine learning enables swift data collection and analysis. While processing previous queries, purchases, and other aspects, the AI can offer better solutions and models for different audiences or fulfill various goals (landing leads, generating sales, increasing the UI comfort, and overall quality of UX.

The beauty of machine learning in these circumstances is that one can teach the AI to deal with any precise type of situations to come out on top and eliminate unwanted losses.

Fraud detection and prevention through AI and ML

According to LexisNexis, financial enterprises are paying a hefty fee for each security failure — up to triple the costs lost to recover from the breach. Artificial intelligence in finance and banking is a lifeline.

Large banking institutions have been slow to adapt to new threats, fighting only the symptoms, if anything at all, based on how outdated the security measures may have been. While the company can focus heavily on security (authentication, encryption, etc.), there will always be a way to lose clients’ money.

Transaction approvals were seen to miss many fraudulent activities and instead block legitimate transfers throughout the world, causing more problems to the clients without actually dealing with the issue.

Analysis of the patterns that predate the frauds allows much more security on all lines of defense. An AI can be taught to notice the similarities between scams and root them out before their inception. With AI's huge potential of multi-tasking and real-time processing, the whole set of protective activities would go unnoticed for the human eye.

Furthermore, an in-depth analysis allows us to spot frauds without placing hundreds of regulations on routine transactions, which means better security and less trouble for us, people who just decided to purchase an item from eBay.

Here are machine learning applications in finance visualized by Guardian Analytics:                    

Stock market forecasts via trained artificial intelligence

Today’s stock exchanges are worth about $69 trillion. To navigate this vast pool of money and companies, to determine the most productive activities, one must be no less than a stock mastermind, especially when it comes to predicting the behavior of the stock markets.

Machine learning technology makes the job much more manageable. By analyzing millions of units for stock data simultaneously, the AI can adapt to the market condition and come up with a much more accurate prediction for much less time. The data about the companies is only one side of the coin, with other being media mentions of the businesses that may take effect on stock value, like that interview of Elon Musk by Joe Rogan not so long ago.

It is fair to say that the analytical capabilities will grow further, as the proficiency of an ML-based AI increases with each processed operation. The more companies it analyses, the more predictions it makes, and more accurate these will become in the future, with an ever increasing layer of auxiliary factors that may influence the stock value.

Machine learning and investment banking

By using automated analysis machine learning helps with identification of the client’s positions for follow-on equity offerings of current financial positions, market conditions, and historical data. Additionally, AI allows diving deep through an accurate analysis of the company’s risks. It even enables easier and effective deal teams via negotiations and valuable insights on targets.

Custom software and solutions based on machine learning advancements

Machine learning in Fintech is an insanely powerful tool to automate processes, cut expenses, and come up with much better analytics and predictions. However, every business is a unique enterprise and has its own needs, vision, budgets, etc.

The technology has to yet offered a universal solution to all issues of the financial market (or any other market). All machine learning solutions are still created and maintained by human professionals, and it will remain that way unless a full-scale sentient AI emerges.

Machine learning use cases in Finance

Machine learning and Fintech algorithms allow building a solution that would fit any particular need (from fraud detection to face swap on pictures and videos). Big companies make custom ML-based solutions to meet the demand of their audience — for example, account and asset management for digitally active clients (Weatherfront).

Machine learning for the banking industry: does your business need it?

But only you know what kind of machine learning solutions you need for your business. Try to define a set of goals to complete or issues to fix, and start from that. Many companies offer help in building software using these technologies.

If you’re unsure what to choose or whether you need an ML or natural language processing solution at all, you can always message us.

We will try to help you with all professionalism and advise how to implement machine learning projects in Finance.

Let's talk.