How AI improves various functions such as fraud detection and portfolio management

Finance


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Here are some of the most popular ways AI is already being used in the financial industry.

important facts

Klaus Schwab, founder of the World Economic Forum, describes the Fourth Industrial Revolution as the use of various technologies such as AI to connect the digital, physical and biological worlds and impact all industries, functions and economies. I explained that it was an era characterized by

Global interest in AI has peaked with the recent explosion of powerful AI tools such as OpenAI’s ChatGPT and Google’s Bard, but companies in the financial sector are already using AI to improve their systems. I’m here.

Portfolio management

Portfolio management is the act of an individual or company selecting and managing a group of assets such as bonds, cash and equities that meet their long-term financial goals. According to the CFA Institute, AI can be used to perform “sophisticated” analytics to optimize portfolio asset allocation. For example, AI can provide return estimates that can be used for optimization. Deloitte reports that AI can also be used to read and evaluate earnings records, identify relationships between securities and market indicators, monitor and analyze word search engines on key topics, and help shape hedging strategies. . The report also claims hedge fund Man Group has used AI to help manage its investments, resulting in a fivefold increase in wealth since 2014. Capital, Benzinga, FactSet), Trade Ideas (clients include Interactive Brokers, NYSE, Nasdaq), Sentieo (clients include Schroders, BMO Capital Markets, MFG Asset Management).

insurance

Many insurers are already using AI in multiple ways, including underwriting, claims processing, fraud detection, and customer service. One of the most user-friendly ways is with a customer service chatbot. Lemonade, Allstate, and Geico all use chatbots to provide basic advice, such as billing information, and to address frequently asked transaction questions. According to a report from the National Association of Insurance Commissioners, out of 193 insurers surveyed, 135 reported using AI or machine learning in their claims operations. According to a report by Insurance Europe, AI can automatically read, interpret and process documents and photos, classify cases as they arise, significantly reducing case processing time for customers, and provide protection against different types of injuries. Help us make your claim process more efficient by giving you a reasonable assessment. AI will also use the technology to gather information about an individual’s marital status, geographic location, and likelihood of filing a claim, and to set premiums based on this information, which will help insurers gain a competitive edge. It also helps with some pricing.

insurance

Many insurers are already using AI in multiple ways, including underwriting, claims processing, fraud detection, and customer service. One of the most user-friendly ways is with a customer service chatbot. Lemonade, Allstate, and Geico all use chatbots to provide basic advice, such as billing information, and to address frequently asked transaction questions. According to a report from the National Association of Insurance Commissioners, out of 193 insurers surveyed, 135 reported using AI or machine learning in their claims operations. According to a report by Insurance Europe, AI can automatically read, interpret and process documents and photos, classify cases as they arise, significantly reducing case processing time for customers, and provide protection against different types of injuries. Help us make your claim process more efficient by giving you a reasonable assessment. AI will also use the technology to gather information about an individual’s marital status, geographic location, and likelihood of filing a claim, and to set premiums based on this information, which will help insurers gain a competitive edge. It also helps with some pricing.

Fraudster detection

According to IBM, $44 billion will be lost to fraud by 2025, with 72% of business leaders citing fraud as a growing concern. Companies are using AI to help detect and prevent online fraud by allowing them to use historical data to train software and suggest risk rules. You can implement these rules to allow or block user actions such as suspicious login attempts, fraudulent transactions, and identity theft.according to luck, Top companies such as Google, Amazon, and Microsoft all use AI-powered fraud detection services to identify hackers and suspicious logins. However, there are drawbacks, such as the software tends to flag the actual person logged into the account. luck The Microsoft system that protects customers from fake logins reports a false positive rate of 2.8%. His three types of scams are common in the banking industry: phishing, identity theft, and fraudulent transactions. In 2021, Fintech News reported that financial institutions spent his $217 billion on AI for fraud prevention. Banks can use AI to create fraud scores, determine legitimate and fraudulent transactions, create purchase profiles to understand customer behavior, and create lists of suspicious attempts to investigate. recommends his Telus International, an information technology company.

tax management

GCC FinTax says AI can be used to increase tax collection, create an accurate profile of each customer, detect fraud and reduce tax evasion, make more efficient calculations and reduce time spent on audits . According to the Forum on Tax Administration’s 2022 report, more than 70% of tax administrators surveyed are using innovative techniques such as AI to uncover previously hidden assets or expose new risks. I am trying to identify. EY reports that tax teams spend between 40% and 70% of their time collecting and operating. This is what AI can do in “a fraction of the time”. But EY believes one of the biggest reasons tax teams aren’t adopting AI is a lack of trust. A senior executive at the company said tax professionals are expected to “stand by their decisions and demonstrate work that supports their decisions,” noting that AI should follow the same standards. Companies like H&R Block, Intuit and FlyFin are using AI in their tax processes.

References

Bard Vs. ChatGPT: Explaining Key Differences in AI Chat Tools (Forbes)

Here’s What You Need to Know About OpenAI’s ChatGPT—What Confuses You and How You Use It (Forbes)

You’re Already Using AI: Where AI Is in Everyday Life, From Facial Recognition to Navigation Apps (Forbes)

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