Artificial intelligence is a ground-breaking technology that is helping businesses in multiple industries to improve their results by using data and computing power to come up with the most optimal solutions to the most common problems.
This type of software uses algorithms and data sets, detailed in the Artificial Intelligence course, to determine the track of every scenario and then learns from the outcome and adjusts accordingly. As a result, these programs are designed to progressively improve until they reach a high level of efficacy.
Financial firms are well-known for being data-driven businesses that rely on hard facts and figures to make decisions such as whether a company or individual meets the required criteria to be granted a loan or if a certain financial product is suitable for a given investor.
With this in mind, artificial intelligence has much to offer to companies within this robust sector of the economy. In this article, we discuss how this technology can help the entire industry leap to a whole new level.
Data-Driven Marketing
Financial institutions are heavily regulated and from many angles. The way in which products and services are advertised needs to comply with several guidelines to make sure that consumers understand both the benefits and the risks involved when they expose their money or opt to apply for a certain solution.
Therefore, the marketing budget of financial businesses has to be spent meticulously to both avoid fines and reach out to their target audiences.
Artificial intelligence can be used to generate a customized selection of products and services selections that can cater to the specific needs of every audience identified by the institution. Companies like Personetics are pioneers in this particular field as they have come up with solutions that can improve customer engagement by over 50%.
This should lead to an increase in conversion rates and an overall improvement in the financial performance of the business.
Automated Treasury Management
Banks and other similar financial companies have to manage their cash wisely by properly allocating their liquid reserves into profitable and relatively safe financial instruments. Insurance companies have very unique needs in terms of cash flow management as well as these resources can be used to supplement the proceeds earned from writing policies and selling other products.
Artificial intelligence can optimize how money flows in and out of the company’s accounts by following a set of pre-established guidelines and parameters. In the ideal scenario, the software will be able to execute all the required transactions in a matter of seconds and allocate the money in a way that maximizes gains for the business.
Expedited Internal Processes
Waiting times are among the biggest issues that frustrate customers when dealing with a financial institution. For banks, this could take the form of delays in the process of reviewing all the required paperwork to assess the creditworthiness of a prospective borrower while insurance companies may also have to complete several steps to analyze a client so an adequate premium can be estimated.
All of these internal processes, which are usually partially performed by humans, may be improved with the help of artificial intelligence. By using historical data sets, the proper software can easily analyze what kind of customer has been the most punctual when it comes to paying back a loan and start from there to determine the interest rate that should be applied to all prospective borrowers.
In the case of an insurer, there is a lot of data to analyze once the customer has given up his personal information such as age, city of residency, past illnesses, employment situation, and other similar variables. All of this information can be processed and analyzed by a program that can provide recommendations in regards to the premium to be charged, payment plans, and coverage.
Improved Reporting
Finally, it could be hard for managers at both the mid and senior levels of a company to determine what information is the most useful to assess the business’s performance, emerging trends, and potential opportunities that are popping up in the marketplace.
With the support of AI-powered solutions, reporting a company’s performance can become much more than just creating slides in MS PowerPoint. It can turn into a deep dive into the most interesting developments that the software has managed to identify during a certain period.
Bottom line
The universe of possibilities when it comes to how AI can improve the performance of companies within the financial industry is just enormous. With so much data at their fingertips, the right software can help them in optimizing almost every aspect of the business to produce better results and serve customers better.
Founder Dinis Guarda
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