Today Artificial intelligence has been able to permeate every industry possible. This explosion of AI has been inevitable and long-awaited. Covid in many ways, was the force that set the ball rolling. During Covid, users were forced to use an alternate method of payments which then led to innovations and the change in the AI business – shares Alok Kumar Agarwal.
According to the Principal Scientific Advisor (PSA) to the Government of India, the expenditure for AI grew by 109.6% or US$ 665 million in 2018. Today, we are experiencing growth and popularity in the AI industry due to these measures by the Government. Moreover, the AI expenditure will see an exponential growth rate (CAGR) of 39% (Between 2019-25) to US$ 11,781 million by 2025. Another report by NITI Ayog states that the AI sector can potentially add US$ 957 billion or 15% of the current gross value to the country’s economy in 2035.
With so much money flowing into the system, AI in Fintech has developed many use cases and has been under constant change. One of the primary and important uses is Fraud Detection. AI algorithms can analyse patterns in financial transactions to detect suspicious activity and reduce the risk of fraud. In addition, AI-powered chatbots and virtual assistance can now provide customers personalised financial advice based on their financial situations and goals. AI is also used by hedge funds and investment firms to analyse market data and make trades.
“Every business today needs to adapt with the changing time. AI is the technology that has the potential to revolutionise how we handle business. The uses for AI tech are innumerable; however, we need to err on the side of caution while dealing with AI,” Shares Alok Kumar Agarwal Alankit.
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Customer service is probably one area where the importance of AI has been felt the most. AI chatbots can provide quick and accurate responses to customer inquiries, freeing up human customer service representatives to handle more complex issues. Even the experience of users has become much smoother in the case of simple queries.
With these changes and innovations, the fintech industry will surely scale new heights. With AI-backed systems in place, there is a substantial increase in efficacy. AI can analyze a large amount of data quickly and accurately, leading to more efficient processes in the financial sector. It also helps in improved decision-making processes by using data across different areas and fields. A human may miss a connection in massive data, but AI can be specially designed to detect fraudulent activities and save a company’s losses from fraud.
However, any technology has its downside too. As the Fintech industry deals with money, data safety is foremost. AI systems can be vulnerable to data breaches, which could lead to the loss of sensitive information. Another thing to note is the fact that the AI models may perpetuate and even amplify biases present in the data they are trained on. . It may lead to prejudiced or biased findings based on the data.
“With the advancement in technology every second and the ongoing changes in the FinTech industry, we may need to understand the ramifications of the same to get ahead of the problems with AI. Relying too much on AI models can be dangerous as they lead to human oversight and decision-making,” shares Alok Kumar Agarwal. AI has great potential to benefit the Fintech industry, but appropriate measures must be taken to mitigate the risk to ensure that AI is ethically used.
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