Imagine a world where financial decisions are made in a fraction of a second, fraud is greatly reduced, and people can take informed risks. This is the future as AI becomes more and more integrated into financial services.
It may sound surprising, but the finance sector is at the forefront when it comes to AI integration, exhibiting one of the highest adoption rates across industries. In 2023 the financial services industry invested an estimated $35 billion dollars in AI. Capital One leads banks in AI adoption followed by JPMorgan Chase, and the Royal Bank of Canada.
In 2023, over 40% of financial institutions used Gen-AI. In addition, the global Gen-AI market in finance is expected to increase at a compound annual growth rate of 28.1% between 2023 and 2032. This also means that it will go from a $1.09 billion dollar market in 2023 to a $9.48 billion dollar market in 2032.
Mckinsey Global Institute estimates that the impact on the banking sector could be massive with the total potential added value ranging from $200 to $340 billion dollars. This added value is staggering.
While there are many benefits of integrating AI into the finance sector, there are also risks to be aware of. We will also explore some of the most efficient ways to integrate AI into financial services. These financial services impact us all, and even companies with a finance department will soon contact AI if they haven’t already.
What are the Benefits?
Speeds up Tasks
One of the most obvious benefits of integrating AI into financial services is that it speeds up tasks. Like other industries AI is largely augmenting the tasks performed by employees whether it be back-office automation, data aggregation and visualization, and fraud prevention. A few areas where AI can be a great help are in loan processing, customer onboarding, and check deposit processes since they are not very well integrated by the majority of the banking systems. It may take a long time to receive a mortgage loan with all of the steps involved, but the time can be greatly reduced if they can adopt new age cloud solutions faster.
Fraud Prevention
In addition, another area that AI can benefit financial institutions is in fraud prevention. AI can help combat fraudulent activities such as money laundering for example. This will allow financial institutions to validate transactions, bolster security, and respond to threats. Another great example is how companies are now using AI to monitor a large number of credit card and e-payment transactions daily, detect changes in our purchase behavior, and pro