Artificial Intelligence (AI) has been applied to all aspects of life. The banking sector in general and the financial technology sector (FinTech) in particular is one of the industries that have dramatically changed because of the influence of core technologies in this 4.0 industrial revolution.
1. Influence of AI in FinTech
FinTech is defined as “technology-based financial innovations to create new business models, applications, processes and products that have specific impacts on financial markets and institutions, as well as in the provision of financial services” (According to the Basel Committee on Banking Supervision). In recent years, FinTech has received a lot of attention and investment from many financial and banking institutions, technology companies and venture capital funds. According to PricewaterhouseCoopers, FinTech Startups have received over $40 billion over the past four years. The Asia-Pacific region received nearly $15 billion invested in FinTech from 1/2016 to 2/2017.
Artificial Intelligence (AI) has brought the technology world into a big hurricane as it allows companies to cut costs, automate a variety of processes, and promote business profits. FinTech is not out of the reach of the AI wave. AI is playing an important role in changing FinTech such as: helping to improve the security, reducing data processing time accurately and quickly; reducing the cost of repetitive activities and human errors; increasing automation levels; etc. According to a study, the global AI in the FinTech market will increase to 7,305 million by 2025 compared to 1,337 million by 2017.
2. Application of AI in FinTech
Some of the AI applications in FinTech can include: AI data analysis giving proposed results and helping managers in making better decisions; Automated customer support via chatbot; Fraud detection and complaint management; Automated financial assistants assisting users in making financial decisions; Forecast analysis in financial services; etc.
Chatbot – Automated Customer Support
The deployment of the smart chatbot at banks has begun to flourish. In the financial and banking sector in general and FinTech in particular, chatbot has the ability to: Notify users of all changes; Manage user accounts on demand; Work with users’ complaints; Provide users with useful information; Provide solutions to users, etc. Chatbot helps to increase the customer experience as well as customer loyalty to the products of the business.
Automated virtual finance assistant
The mentor robot is a special type of chatbot created exclusively for FinTech, which is a software replacing for a portfolio manager and can evaluate the direction of risky investors, choose an investment strategy and even sell/buy securities at the selected exchange rate.
Fraud detection and complaint management
Analytical tools use AI to gather the evidence and analyze required data, then investigate and track patterns of user behaviors to identify signs and warnings of frauds and problems; help reduce the overall processing time as well as enhancing the customer experience. With its self-learning ability, AI can then adapt to new unexplored cases and further advance the detection over time.
Insurance management with AI system will automate the guarantee process and use a lot of raw information to make better decisions for customers. Rather than paying for costly treatments for insurance, it is better to identify risks and illnesses to prevent them. Therefore, one can use previously used data to access the risks, and then reduce the probability of damages to the insured and also to the insurers.
Forecast analysis in financial services
Forecast analysis in financial services can directly affect overall business strategies, increase revenue, generate revenue, and optimize resources. AI tools gather, arrange and analyze for the quick deployment of solutions, customized for each client. Forecast analysis can help to calculate credit scores and prevent bad debts.
3. The FinTech Market in Vietnam
The opportunities in the field of FinTech can be seen clearly and Vietnam is not out of that playing field. Solidiance’s research said that: The Vietnamese FinTech market had reached $4.4 billion by 2017 and would reach $7.8 billion by 2020. The Vietnamese government is also playing an active role in creating a legal framework which is increasingly supportive, through the establishment of the FinTech Steering Committee and other measures.
With great funding and intense competition, it can be said that AI is a powerful tool for FinTech companies to create a competitive edge in the 4.0 industrial revolution.
In Vietnam, FPT.AI – a comprehensive artificial intelligence platform, has assisted many banks and financial institutions in automating and optimizing operational processes such as deploying chatbot for digital wallet products of the 1st bank in Vietnam, the automatic hotline helps one of the three biggest credit institutions in Vietnam handling nearly 100,000 calls a day and about more than one million calls in a month.
What AI can do is supporting, consulting, and creating the better customer experience. Let’s see how big FinTech players will promote technologies to improve the financial sector.
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