Personal Finance, Reimagined by AI

Artificial intelligence (AI) seems to be something new, but the term ‘artificial intelligence’ was first used by John McCarthy, a mathematics professor at Dartmouth College, in 1955. But one must admit that after ‘a November 30, 2022, has become a household name after ChatGPT brought AI innovation into our daily lives. Imagine teaching a computer to think and act like a human. That’s exactly what artificial intelligence is. It is the technology to create intelligent machines that can perform tasks that normally require human intelligence, such as understanding language, recognizing patterns and making decisions. “When discussing AI, it’s important to understand its basic principles. While AI can perform many tasks for itself, true AI involves more than simply following predetermined rules. It requires skill. of learning and adapting based on new information, just like a person,” says Arun Ramamurthy, head, digital transformation, Andromeda, a credit broker. In this story, we look at how AI is slowly but surely becoming an integral part of your financial life. AI In Banking According to McKinsey’s 2023 banking report, artificial AI can improve productivity in the banking sector by 5 percent and reduce global costs by up to $300 billion. Naturally, when it results in cost savings for the banks, that is passed on to the customer as well. In addition, bank customers benefit in other ways as well. Here, let’s talk about customer cyber security, which is an important issue in the banking industry because of the sensitive information it deals with. The financial sector accounts for more than 30 percent of all cyber attacks and can be called the sector most targeted by cybercriminals. Jon O’Donnell, Chief Operating Officer, Acuity Knowledge Partners, a provider of bespoke research, analytics and technology, says: “An early warning system that uses AI to detect malware, trojans and phishing actively adopted by banks. services sector.AI Insurance “When it comes to insurance, AI for customer experience is really about simplifying the product technique for the customer, make the customer more informed during the purchase and provide a seamless experience with the insurer during the policy period without having to have or rely on minimum coverage in many ways,” says Krishnan Badrinath, Head Technology – Innovation, Presales and Automation, TATA AIG claims process. “For example, AI can now handle the entire process of inspecting a car with photos, providing quick and accurate assessments without and lack of human assistance, which accelerates the settlement of claims,” ​​says Santosh Bhat, Head of Data Science, at PolicyBazaar, an insurance aggregator. AI has revolutionized customer service in insurance by combining advanced chatbots with voice bots. “These tools can handle many frequently asked questions and common tasks, allowing people to focus on complex issues, thereby simplifying the customer support experience,” says Bhat.AI In Loans AI revolutionizes the loan approval process by analyzing multiple factors. the amount of data to assess the borrower’s risk profile more accurately. This enables lenders to make faster and more informed decisions, reducing the time it takes customers to get approved for a loan. “We use AI throughout the process, starting with loan rates and loan approval and then the process. To give you the best loan rates, we combine various data points, including income your credit score. We also include information from banks, such as their credit scores. By analyzing this data using our machine learning model, we can generate the most likely rates big approval,” says Mukesh Sharma, chief technology officer, Paisabazaar.com, an online marketplace for financial products. AI In Investments AI is being used more and more. in business. AI trading or AI-assisted trading is changing the investment landscape by revealing hidden insights, be it sentiment analysis on social media platforms like twitter or reddit etc or dynamic portfolio performance . Not just business, AI has changed investing as well.” Traditionally, stock analysis included general recommendations, but modern AI has advanced to evaluate more than 1,500 stocks daily. This technology allows a personalized and systematic approach to investing, which provides facts-based data and time trends, rather than relying on broad, one-size-fits-all advice from previous methods.” says Sarvjeet Singh Virk, Co-founder and MD, Shoonya at Finvasia. advisory, uses AI at every step to facilitate the recovery process regarding unwanted assets. AI In Financial Advice AI-driven financial advice has moved the world away from the traditional algorithmic methods that have been used For a long time “algorithmic financial advice models worked on fixed, rules-based systems such as predictive investment strategies or simplified profiles but now AI is able to adapt and automate individual, based on predefined criteria, but learn from large amounts of real-time data. identify emerging trends, and adjust recommendations accordingly,” says Abhinav Nayar, Founder. and CEO Mool.AI, a company that uses AI to help people make smarter financial decisions. to individual needs, preferences, and market conditions, AI-driven systems continue to improve their understanding, making them more responsive to changes in economic conditions or personal financial conditions, which examples based on an Algorithm that cannot. In fact, in the future we can expect AI. to be your financial advisor. Rohit Pandharkar, Partner, Technology Consulting, EY India says, “Chat advice is where you can go to explain your situation and ask for advice. For example, if you got a bonus during Diwali, you might want to know Invest. Such answers are in discussions, whether with your bank advisor, with your insurance agent or with your financial planner. This will all change with the advisors linguistics majors (LLMs), a type of artificial intelligence (AI) that can perform natural language tasks (NLP), has created the concept of a conversational consultant in personal finance to see advanced models of such tools.AI In Customer Service One of the most common examples of customer service is a call center where customers choose to speak with a customer service representative to receive a policy service request. “We have enabled call centers with an AI powered chatbot that helps the agent to answer the customer’s question about the policy, product and process of a particular transaction without the agent using or looking at a lot of documents and to add a customer. wait for the time. The same will be facilitated for customers and where customers can chat with the AI ​​BOT and clarify all the requirements, “says Badrinath. Velocity, a financial platform for cash flow has introduced Vani AI, a solution that uses artificial intelligence to automate customer calls for financial institutions. Trained on company-specific data, Vani can have natural conversations with customers. The AI ​​​​Dark Spots It is important to understand that using AI in its operation of the daily may sound good, but it may not be an easy decision for every financial institution to make. Business World also admitted this, “We still we are in the process of developing our AI strategy. In fact, it is currently more expensive than picking stocks, since the processing of information requires a very high bandwidth of the computer. ” “Also, AI implementations often require large amounts of data, which can be a challenge for many lenders, especially small fintech companies,” says Ramamurthy. AI in personal finance brings many benefits but also raises ethical concerns such as bias and privacy risk. To address these issues, responsible AI approaches are essential. This includes ensuring fairness by removing bias from algorithms, maintaining transparency in AI decision-making processes, and creating accountability to hold developers accountable for any harm caused. Protecting privacy is essential to safeguarding valuable financial information, and human oversight is necessary to maintain ultimate control over AI systems, ensuring they are used ethically and efficiently.