How Artificial Intelligence and Big Data Drive Success in the Financial Sector
“Data is the new oil,” was the premise of Clive Humby, one of the first data scientists in history, in 2006 when the great power of information was already being visualized. However, like black gold, which must be transformed into gasoline or another derivative to be profitable, data must be processed and analyzed to generate value.
This was later echoed by Michael Palmer, an expert in intelligent business, who stated that “data is valuable, but if it is not refined, it cannot really be used.” And so it is, to drive commercial value in any segment, information must be understood as a competitive advantage.
Artificial Intelligence (AI) and Big Data: A Powerful Synergy for the Financial Sector
According to a study by Business Wire, the AI market in the fintech sector will experience significant growth of 23.37% for the period 2020-2025. The use of this technology has represented an advantage for processing highly vulnerable information and has redefined the way operations, decision-making, and customer interaction are approached.
With the application of artificial intelligence in the financial industry, it is feasible to generate an impact in various areas:
- Data Analysis and Predictions: Financial institutions can predict market behaviors, assess credit risks, and anticipate customer needs through AI’s ability to analyze large volumes of data in real-time.
- Risk Management: In the financial sector, it is especially important to be alert to possible money flow events. Tools such as voice recognition and biometrics, powered by AI, add a layer of security that helps identify customers and prevent fraud.
- Customer Service and Personalization: With AI, it is not only possible to predict user behavior to anticipate their needs and provide better service, but also to offer 24-hour customer service with quick and accurate responses to common questions through the implementation of chatbots and virtual assistants.
- Process Automation: Through AI, it is possible to automate manual processes such as loan approvals, insurance claim management, and portfolio reconciliation. This way, financial companies can improve their efficiency and reduce the margin of errors.
- Investments and Trading: The financial market can be very volatile, so it is necessary to make and rethink decisions based on its behavior. For this, AI-based trading algorithms act as an army of financial analysts by quickly verifying data and creating investment measures in fractions of a second. According to a JP Morgan report, in 2020, more than 60% of transactions over USD 10 million were executed through algorithms. It is expected that by 2024, the algorithmic trading market will grow by USD 4 billion, raising the total volume to USD 19 billion.
- Portfolio Optimization: AI can help financial advisors make more informed decisions, as its application allows for the analysis of investment portfolios and recommendations for adjustments based on past performance and market trends.
- Regulatory Compliance: Through the application of AI, it is possible to automatically analyze and evaluate financial regulations and laws in real-time, reducing the risks of non-compliance and fines.
Intelligent Monitoring to Safeguard Banking Infrastructure
Applications in the banking sector must run smoothly and without interruptions, for which artificial intelligence plays a fundamental role, as it preserves their proper functioning through advanced monitoring solutions.
Some key benefits of implementing monitoring and AI to prevent application degradation in the banking sector include:
- Proactive maintenance.
- Performance optimization.
- Efficiency in problem-solving.
Undoubtedly, data analysis through artificial intelligence enhances commercial value. By turning data into actionable information, organizations can remain competitive in a business environment subject to constant market changes.
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