• Arnold Ma, Founder at Qumin


• 27.07.2023 02:00 pm
#ai #financialservices

In recent years, the integration of artificial intelligence (AI) in the financial services industry has become a focal point, with various strategic plans being implemented to promote its adoption. Arnold Ma, the founder of Qumin, a leading digital agency representing brands like Standard Bank, Tencent, and TikTok in China, sheds light on the prospects of AI in finance and the transformative applications it will bring to the sector. He emphasises the benefits for consumers while addressing the limitations and challenges of implementing this technology.

Current State of AI in Financial Services

A study by the World Economic Forum reveals that AI adoption in the financial services industry is already significant, with 85 percent of organisations claiming to currently use AI in some capacity. Additionally, 77 percent of these organisations believe that AI will become essential to their businesses within the next two years. The study also indicates that 64 percent of them will be mass adopters of AI in the next two years, and 52 percent will have created AI-enabled products and services.

The impact of AI on financial services has been remarkable, driving innovation and enhancing capabilities across the sector. It is estimated that by 2035, banks could improve their productivity by 4.3 percent annually thanks to AI, with the potential to increase financial services revenues by an impressive 34 percent. Various intelligent financial scenarios have emerged through the integration of AI, such as intelligent marketing, recognition, wealth management, risk control, and customer service.

Examples of AI integration include the Bank of Communications' "Unified Image Recognition Platform," which employs computer vision, machine learning, and AI to improve information extraction and recognition rates, leading to enhanced business efficiency. Tencent YouTu, a multi-modal technology platform, enhances structured extraction of OCR information from non-standard documents, significantly reducing information entry time and labour costs. British banks have also embraced AI and other digital tools to support consumers and business owners seeking assistance.

Future Potential of AI in Financial Services

The future holds even greater possibilities for AI in the financial sector, with financial service companies projected to spend an additional $31 billion worldwide on AI by 2025, driving substantial advancements in the industry. As voice recognition, vision technology, and realistic interconnection technology continue to progress, new formats will emerge, fostering further innovation in the industry. AI's scope will expand, covering a broader range of scenarios, leading to the complete digitization of financial processes. The continuous development of zero-trust architecture and privacy computing technology will strengthen data security, establishing a trustworthy foundation for financial institutions' data fusion initiatives.

Delivering Benefits for Consumers

AI is playing a pivotal role in the digital transformation of financial institutions, providing numerous benefits for consumers. By integrating AI within financial services, institutions can reduce costs, improve efficiency, and enhance the overall customer experience. A survey of global financial services professionals showed that 36 percent of them decreased annual costs by more than 10 percent through the use of AI applications, with 46 percent noting an improvement in customer experience. AI enables round-the-clock responsiveness by providing access to "thousands of experts," offering prompt and personalised assistance to customers. Moreover, AI-driven improvements in information accessibility create a level playing field for businesses of all sizes, granting smaller enterprises better access to credit and fostering a more inclusive and effective economy and society.

Limitations, Criticisms, and Frustrations

Data security and reliability remain significant concerns for financial institutions when implementing AI solutions. To address these concerns, continuous enhancements in zero-trust architecture and privacy computing technology are necessary to ensure the trustworthiness and safety of data. Implementing more reliable technologies for access security, business security, and data security is crucial in mitigating risks. Financial institutions should also consider recommendations from experts to ensure a secure and robust AI implementation.

Customer-Centric Finance

The integration of AI and finance holds immense potential, leading to transformative changes in the financial services landscape. The future of financial AI development looks promising, with substantial benefits for financial institutions and consumers alike. Despite challenges related to data security and reliability, continuous advancements in technology are solidifying the foundations for secure and reliable AI implementation in financial services. As AI continues to evolve, it will revolutionise the industry, paving the way for a more efficient, inclusive, and customer-centric financial ecosystem.