Financial Services

Artificial Intelligence Enhances Financial Service Firms

Previously, I discussed how artificial intelligence (AI) can assist financial services firms. This blog highlights the benefits of AI strengthening cybersecurity and boosting profitability.

AI for Strengthening Cybersecurity

Another important horizontal use of AI technology relates to cybersecurity. Given the complexity of the disjointed set of security tools typically deployed in an enterprise, and the ever-changing landscape of potential threats, AI applications can continuously digest volumes of data intelligently while looking for patterns indicating intrusions or malware.

AI cybersecurity applications are being used by financial services firms to identify activity originating from malicious bots and to detect compromised login credentials, alerting both customers and companies to security breaches instantly. Some security applications are also capable of assessing the actual configuration of a firm’s security appliances and trigger alerts if suboptimal controls are found.

AI for Boosting Profitability

Specific to financial services, there are myriad potential areas in which a firm can gain a competitive edge with AI technology:

  • Underwriting
  • Credit decisions
  • Risk management
  • Fraud
  • Anti-money laundering (AML)
  • Market trends
  • Program trading
  • Portfolio management
  • Personalized client advice (next-best-action)
Financial Services - It's Time to Focus on Post-Digital Transformation in Banking
It's Time to Focus on Post-Digital Transformation in Banking

Digital transformation challenges in banking have been well understood and the strategies to address them simple and clear. However, it is becoming increasingly apparent that the industry is reaching a tipping point in the digital transformation journey.

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With their ability to ingest, analyze, and recognize patterns in large data sets, AI applications can assist in better underwriting and credit decisions. Working off of a firm’s historical data stores and data points from credit bureaus, demographic information, and other sources, the applications can learn to identify those situations that support a firm’s credit and underwriting policies, reducing risk and minimizing losses. Similarly, by dynamically analyzing transaction patterns, AI applications that are focused on fraud prevention can signal alerts when potential fraudulent, money laundering, or other unauthorized activities, are encountered.

artificial intelligence

Not limited to preventing losses or fraudulent financial activities, AI technologies can be deployed to identify opportunities for increased revenue. There are AI vendors specializing in applications that can assist in recognizing market trends in real-time to benefit a firm’s proprietary trading strategies, as well as providing advice to their clients. Other AI applications are dedicated to supporting a firm’s clients by assessing the market and customer-specific data to recommend optimal portfolio allocations and advice as to the next-best-action to be taken. These customer-focused AI deployments can be an important construct in delivering a firm’s vision for improved customer experience or overall digital transformation program.

Starting with AI

With so many AI vendors and products, both cross-industry and industry-specific, it is difficult for many firms to know where to start. Some of these vendors and their products will rise to market leadership, while others will likely be absorbed into other providers or cease to exist. Selecting the right AI solution is, therefore, of paramount importance. With dedicated practices in artificial intelligence and financial services, Perficient is well-positioned to guide you through the process from concept through implementation.

Learn more about the benefits AI will have on customer service, cybersecurity, and increasing profitability in financial firms by downloading our perspective piece here, or submitting the form below.

About the Author

David Willner is a business-focused information technology executive in Perficient’s financial services practice. His specialty is in transformation and data strategy programs. Before Perficient, he served as a managing director at J.P. Morgan Chase, senior managing director and chief development officer at Bear Stearns, and chief information officer, corporate comptrollers, at AIG. When he is not improving our client’s operations, systems, and data, he can be found playing guitar in his blues/rock band.

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