In the last year, we could experience massive progress due to Artificial Intelligence. Because of the fast development of this technology, we can expect further developments in the next years, also in the finance sector. But how can these developments look like? What did AI already changed in the finance system? And what else can we expect in the future?
Automatisation of trading and KYC
The algorithmic trade is daily routine in the trading area now. Therewith it is meant that the markets are analysed by trading bots and these are trading automatically. The technology enables more explicit predictions and knows when it is worthwhile to buy and when it’s not. The job of the trader can be undertaken fully from Artificial Intelligence. For that reason, one can reckon with more usage of AI models for trading purposes in the next years. In all likelihood, trading decisions as well as the prediction of prices can be completely conducted automatically.
Know your customer (KYC) is already automatized based on AI. The verification of a person with ID and face as well as the camera of laptop or smartphone is popular for establishing a bank account. Previously, the client had to wait for a free employee who confirms the identity. Today this works quickly with AI tools. These are determining whether the face coincide with the photo of the ID. So users as well as the staff are able to save time and use it for other important tasks.
Fraud prevention with AI
A significant topic which was developed because of AI is the fraud prevention. Today, capital flows can be analysed completely and in real time with AI tools. This leads to a better surveillance and a faster recognition of money laundering and other frauds. Because of AI, outlier in capital flows can be recognized quickly. For example, if the head of a company transfers four-digited amounts every month, this is not conspicuous. But if a five-digited transfer to foreign countries appears, this would be stopped because such a transfer is unusual and suspicious. In such cases, the owner would be asked if the transaction is correct. Not until that the transfer gets enabled again.
Moreover, with AI it can be better controlled if someone is on a sanctions list. Up to now, such scrutinies were made by compliance managers. Now, the capital flows are made more understandable as well as more legible for them with the help of the AI technology. Namely, Artificial Intelligence is capable to analyse a big amount of data. And that happens a lot quicker than if a human makes it. This leads to more efficiency.
More changes in 2024
In this year, the blockchain technology will work a lot more with AI. Companies like Chanalysis are concerned with the origination of transparency in the crypto sector already. The blockchain analysis company is a support for financial institutions, government authorities and other crypto companies when it is dealt with the work with cryptocurrencies. They own a software which address adherence of crypto compliance regulations. It is possible that the number of such companies and software will rise in the next years because also the demand increases. Additionally, there will be an automatic review with Artificial Intelligence.
Last but not least, one can reckon that the tasks of a bank consultant will occur completely automatised in 2024. There is a possibility that chatbots like ChatGPT are capable of opening accounts and concluding contracts. Therefore, the input of a special prompt would be necessary. In general, there is potential that services in the B2C area are getting more automatised and will be assumed by AI.
Author: Maximilian Schmidt is CEO of the CPI Technologies GmbH. The company is specialized in software development in the areas artificial intelligence, blockchain and digital product development. https://cpitech.io/de/