Future of Finance is AI
Pretty much every sector from crime to clothing is being affected by AI, but it is in finance that AI is amplifying its efficiency to new levels. One of the primary benefits of AI in finance is promoting a more affordable business model. This allows firms to process tens of thousands of transactions in seconds that would have taken hundreds of employs days. After the initial sunk cost of introducing AI, in the long term, this would be far more profitable as finances could be diverted from employee salaries, insurance and real-estate for the offices to reinvesting in the company to increase productive efficiency further increasing profits. Alternatively, the funds could be used for a socially beneficial product to create a more neutral impact on society after displacing jobs. This would be particularly beneficial in regions such as Africa where banks and financial institutions only provide 3% of overall employment but the increased finances form introducing AI could create a far greater positive social impact such as subsidising anti-malarial bed nets.
Another useful use of AI in the finance industry is in accurate market analysis. As a human would take multiple hours to find, categorise and analyse all of the information available but with AI the process becomes much more efficient. This is particularly useful as most of the information needed is readily available online and there are often tight deadlines to meet when it comes to market analysis. This is already being used extensively in investment banking firms who implement AI to gather information and even calculate market sentiment form tweets by influencers. AI then combines this data with chart analysis and general future trends of the market to make the easiest trade.
A final use of AI in the finance industry is improving customer service with AI chatbots increasing call efficiency and therefore reducing call and wait time. While AI has reduced the customer service time, it has also made it easier and more time-efficient for new less experienced investors to enter the stock market. By increasing demand for shares, the prices are driven up making previously unprofitable companies more financially viable to invest in. This gives them more potential to expand and bring new innovative ideas into their respective markets. To conclude the future of AI in finance looks promising and high competition levels with thousands of AI companies pushing for dominance in the new market will ensure technological monopolies don’t form and that the automation of the finance industry also brings utility benefit to consumers. Additionally, some researches predict nearly all commercial and state banks will switch to AI-based databases, analysis and customer support systems by 2030.