Finance experts all over the world are drooling over the practically unlimited potential of AI. From generative AI tools to serve as chat bots or documentation streamlining to in-depth analytic tools, there’s no shortage of interesting prospective applications for AI in the finance industry. So what can we expect in the next few years?
The Rise of Generative AI
Leaders and innovators all over the world are already using generative AI in banking. Generative AI, in its current form, is capable of producing text, images, and sometimes other media in response to naturally phrased prompts from human users. If you ask a generative AI tool to draft an email newsletter for your customers, covering a handful of topics of your choice, it can do it.
Already, we are starting to see generative AI in the finance industry being used for applications like the following:
- Customer service. With generative AI, customer service agents can quickly generate responses to even the most complicated inquiries, then fine-tune those responses as appropriate, ultimately saving time. In some applications, generative AI tools can be used to interface directly with customers, bypassing customer service agents altogether.
- Data analytics. AI is superior to human beings in terms of analyzing and interpreting large sets of objective data. Human beings just aren't wired to understand numbers the same way they can understand, say, language or emotions. In the financial industry, data analytics is extremely important, so any tools that aid in the objective analysis of the most important data are typically welcomed with open arms.
- Content creation. Many people are now using generative AI for content creation. While AI isn't perfect, it can help you cover basic topics and explain complex concepts in much simpler terms. Whether you're putting together an email newsletter, a new batch of blog articles, or even training materials for your internal staff members, generative AI can help you do it quickly and efficiently.
- Financial advisory. We're not at the level where generative AI can take the role of a robotic financial advisor, at least not directly. But we are at a level where generative AI can help financial advisors better understand the context of their decisions and guide them to better recommendations.
- Efficiency and productivity. Overall, generative AI can be used to facilitate greater efficiency and productivity. For example, instead of spending half an hour writing up a company briefing, you can spend five minutes creating a prompt that allows the generative AI tool to create it on your behalf. Then, you can use your remaining 25 minutes on more important projects, helping you do more throughout the day.
Data Analytics and Personalization
The financial industry depends heavily on data and analytics to better understand how the markets are performing, analyze financial trends, and make predictions for the future. On an individual level, better data analytics can lead to better recommendations and guidance for individual decision making. That's why finance businesses all over the world are starting to use AI for in-depth data analytics and personalization. In the future, we're likely to see even more personalization in the finance industry.
Innovative New Products and Services
It's also possible that more sophisticated AI will lead to more innovative products and services in the financial sector. Leaders in the finance industry can use generative AI to come up with new ideas, or use powerful data analytic tools to better understand their customers so they can come up with better strategies for serving them. And, of course, AI can be directly incorporated into new products and services that customers can take full advantage of.
Compliance is a huge area of concern (and spending) in the financial industry, and AI is streamlining it. This is a complex and ever-changing field, so having a tool that can make it simpler or automate certain aspects of it is a major boon.
The Unknowable Future
It's worth noting that the future of AI is strictly unknowable. Even our best AI scientists sometimes waffle between speculation that general AI is fundamentally impossible and the prediction that AI could, in just the next decade or two, become better than humans at literally everything. Accordingly, it's hard to make predictions about how AI is going to reshape the financial industry.
The Effects of AI on Finance
Still, we can be reasonably certain that AI, regardless of how it evolves, can help the finance industry with:
- Innovative new products and services
- Autonomy and decentralization
- Efficiency and productivity
- Cost savings
Already, the finance industry is evolving in response to the plethora of AI tools now available to business leaders. As these tools grow more sophisticated and diverse in nature, we could witness the beginning of a new age in finance and investing.