The financial services industry is finding intriguing new uses for artificial intelligence (AI). From reaching new customers in nontraditional places to fraud prevention to democratizing access to credit and financial products, AI is in position to influence future financial products and markets.
AI was the main topic of a future-focused panel discussion at the AI in Fintech Forum, hosted by Stanford University’s Advanced Financial Technologies Laboratory on February 8, 2019. The “Next-Generation Lending Technologies” panel was moderated by David Pinski, Head of the Financial Innovation Laboratory at the Hitachi Global Center for Social Innovation–North America (CSI-NA). Panelists included leaders from Figure, Capital One and Goldman Sachs. Hitachi co-sponsored the event, along with several financial institutions.
Pavel Krotkov (Goldman Sachs), Jonathan Gole (Capital One), Alana Aldag Ackerson (Figure) and David Pinski (Hitachi America R&D)
share their expertise and predictions about the use of artificial intelligence in financial services.
In the discussion, the panelists shared their experience and viewpoints about the current and future use of artificial intelligence (AI) in the financial space. Today’s use of AI in diverse areas such as fraud prevention, pricing, prospect identification and targeted messaging was noted.
One of the most intriguing new applications mentioned was an improved ability to reach people in nontraditional financial environments. For instance, in the near future, financial institutions can use AI to more efficiently apply internal and external data resources to reach the unbanked (people without any bank accounts at all). This can help those institutions understand local markets and microfinance opportunities. AI can also be used to help institutions more accurately analyze the concentration of people using a particular service, such as mobile banking.
AI is well established in many lending scenarios, such as credit card fraud prevention, but there is potential for it to do much more. In the years to come, AI will make inroads in fields such as risk management, providing the ability to monitor customers after a one-time service such as a loan.
Full implementation of AI in the financial services industry does face some challenges. Businesses must develop ways to deliver AI results to customers and regulators in simple, understandable language. And they may find their adoption of AI technologies slowed by the complexity of regulatory frameworks and government policies. But when these challenges are addressed, the considerable benefits are there to be realized. As the event chair stated, "We haven’t yet seen the best we will see from AI."