AI is re-shaping financial services

In today's digital world, data is the new gold, and financial organisations need to generate real-time insights from massive amounts of continuously growing datapoints. 

AI offers tremendous potential for the financial services industry. AI has the potential to identify areas of improvement, new revenue opportunities, and trends that might otherwise be missed, but successful AI initiatives are only possible with the right technology stack.

AI can automate repetitive tasks such as data entry, reconciliation, and report generation, freeing up human employees to focus on more complex tasks. AI can streamline back-office operations by automating tasks like document processing and fraud detection. By automating tasks and improving efficiency, AI can help financial institutions reduce their operating costs.

AI can analyze vast amounts of data to assess creditworthiness more accurately and efficiently, making loan approvals faster and fairer. AI can analyze market trends and identify investment opportunities that might be missed by traditional methods. AI can help financial institutions identify and manage risks more effectively, ensuring compliance with complex regulations.

A McKinsey report suggests AI-driven tools have increased portfolio returns by 15% and reduced management costs by 20% in 2024. 70% of asset management firms are investing in AI according to Deloitte Insights, highlighting its growing adoption.

Protecting sensitive customer data is paramount. Robust security measures are essential when using AI in finance. AI algorithms can be complex and opaque. It's crucial to ensure transparency and avoid bias in AI-driven decisions. Automation through AI might lead to job losses in some areas of the financial services industry. Reskilling and upskilling the workforce will be important.

As AI and machine learning technologies evolve, their role in asset management is expected to become even more significant. This will likely lead to further innovation and superior outcomes for investors.

Ms. S Mohini Ratna - Editor VARINDIA