Concepts of machine learning and artificial intelligence have become more present and available in most of the industrial processes. As more and more businesses are turning towards the implementation of machine learning and AI, the benefits reaped from these technologies are unparalleled. And the fintech industry is no longer an exception. The implementation of smarter machines and prediction concepts has provided the benefit of generating the best outputs with the least investments done.
Machine Learning in the Fintech Industry: How It Benefits Investors?
The global fintech market value is expected to hit the mark of $309.98 billion by the end of 2022. This tremendously growing market has seen quite ups and downs- but it has continued on its path to achieving growth. The businesses associated with the fintech industry highly prefer the implementation of the latest technology trends to provide efficient services.
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And as machine learning and artificial intelligence are also part of this list of the latest tech trends, the practical use of these concepts hasn't surprised many of the investors. As machine learning and AI can be extensively used to derive accurate predictions from the available data, many investors and businesses use it to empower their investment decisions and earn more returns.
But apart from this, AI and machine learning can offer many more benefits to fintech businesses that can help drive exponential business growth.
5 Most Popular Machine Learning Trends Driving Growth of Fintech Industry: Techniques that Promise Accurate Results
One of the most popular benefits of using the latest technology trends is that they tend to save time and energy. The resources required might sound expensive at first, but the outputs received are worth the investment.
1. Chatbots for Customer Support
What every fintech investor craves for? A personalized assistant that can guide them through the entire investment procedure and answer their queries anytime. Well, machine learning can give you that. Businesses from fintech industries are increasingly relying on chatbots to deliver an excellent customer experience.
Chatbots are used to guide the investors from the entire process: starting from registration and primary queries to final investment amount and estimated return on the amount. Moreover, the use of transactional chatbots has made it easier for customers to transact their investments or add more within a few taps. These transactional bots not only assure the security of their investments but also implement a high-scale security system to protect the user data.
Moreover, it eliminates the requirement for 24x7 expert human assistance. Rather, businesses can invest in the chatbots that can provide continuous services and deliver excellent experience by serving customers. Businesses can focus on delivering the best services while chatbots can handle all the customer support tasks without needing any human intervention.
2. Fraud Detection and Prevention
Based on their investment and transaction behavior, each investor (a person or a company) is assigned a risk score. If the risk score of an investor is higher, the chances of performing frauds increases and hence, the business should deal with them carefully. But the calculation of the risk score involves many parameters than the ones that are mentioned above.
However, machine learning algorithms can take up this work by automating the tasks at hand and delivering the right risk scores by efficient calculations. And this helps prevent frauds and detect them on a very early basis. Fraudulent transactions can be identified from the available data sets by the assessment of all risk factors and the risk score. It ultimately ends up providing a major benefit to businesses who often suffer from fraudulent transactions.
However, the ML (Machine Learning) model to be used during these operations must be evolving continuously. As the fraudsters always seem to find new ways of performing fraud, the ML model should consider the updated techniques and evolve to provide efficient fraud predictability.
3. Big Data for Stock Predictions
Today's investors believe in making smart investments and achieving better returns. And machine learning has paved its way to meet the user demands and the smart and accurate predictions are more popular among the customers of fintech businesses. They extensively rely on the predictions that machine learning algorithms do- based on the past data, current value, and changing market behavior.
Also known as smart trading, these algorithms are set to predict market behavior and change in the values of stocks. And customers are liking it! As it secures their investment and delivers a great experience. Whether it's a online ordering system or a fintech startup, machine learning has surely found its way to evolve in most areas of the fintech industry.
4. Automated Claim Processing
As the transactional bots are highly encouraging the use of automated transaction processing, the same gets passed on to claims. Customers can now rely on these bots to process their claims highly efficiently and deliver the best services.
And of course, to train these bots machine learning is a highly recommended aspect. Therefore, it not only encourages automated and efficient processes, but it also promises a robot behavior that can streamline major financial operations. It not only helps customers get their claims processed but also reduces burdens from the fintech companies' shoulders by delivering the best services and impressing customers.
5. Personalized Investment Advisors
Generally, investors always seek expert guidance to assure the safety of their investments. But with machine learning and automation, it becomes easier to seek expert guidance from personalized robot advisors who can assess the market risks and deliver excellent services.
The accuracy of their advice and investment planning is much higher than others and because of it, many investors are turning towards these robotic personalized advisors rather than considering the human advisors. The total assets under the management of robo advisors amount to $1,442,028 million. And the implementation of machine learning constraints drives the usability of these advisors to reach new heights.
Further implementation of machine learning concepts needs expert human assistance to guide the execution. The introduction of machine learning concepts to the fintech promises to offer better user experience and deliver exceptional performance and extended usability.
Not only machine learning but the concepts of big data analytics and artificial intelligence are playing major roles in advancing the operations of fintech. The increased use of these constraints aims to craft a better experience that can turn out to be extraordinary for most of the investors and the companies too.