Artificial Intelligence and Its Impact on Finance Industry

Artificial Intelligence

Artificial intelligence, also known as AI, is typically a sector of computer science, which mainly consitst of intelligent machines, which operate like human beings. Some of the duties that AI are designed to do include solving problems and recognition of speech. Artificial Intelligence is a component of computer science whose objective is to implement intelligent machines. It is an integral part of the technology industry. In this digital era, artificial intelligence technologies are having significant impacts in factories and industries. It helps with improving the availability of new products and services and ensuring the presence of new business models. The development of artificial intelligence has made significant changes in the financial industry by causing great changes in the capital market. Primarily, this has been effective through various value chains like driving automation and thought intelligent analysis and decision making in the industries.

Arguably, the market for artificial intelligence technology is increasing substantially and there is also a significant increase in investment by different enterprises. According to scientific research, at least 38 % of industries are already using artificial intelligence and the percentage is increasing significantly. Mostly, the financial sector is focused on developing, and implementation of AI for speed, accuracy, and efficiency. In the transformation of artificial intelligence, there are machines learning algorithms which is a software that improves when fed data. This is a tendency which benefits the finance industry in a significant way.

Impacts of Artificial Intelligence in the Finance Market

Application of artificial intelligence in the financial sector has caused various impacts. For instance, there have been increased efficiency and the creation of jobs. Identically, artificial intelligence provides smart analysis and also increases automation in data review and customer service. AI, therefore, is crucial in finance fields which cannot afford to be ruined through inaccuracy that is involved by decisions made by human beings.

Potential customer identification: AI comprises of a customer profile creation model which can enable banks to create labels for clients by use of machine learning algorithms which are fundamentally based on extensive data from customers (Neiger, 2018). Relatively, this which can help the financial sectors to realize the most prospective customers hence engage with them based on their characters which can lead to an increase in sales.

Precision marketing: Artificial intelligence can ensure that employees give better performance at their workplace through smart analysis and efficient decisions (Ayers, 2016). For instance, analysis on social media can be improved through cognitive computing and gaining customer attention through social media feedback, making the finance industry to meet the customer's requirements and needs.

Robo advisers: They are usually used to give different customers with various backgrounds advice on their investment database regarding the market and the investor's data. These robot advisers save banks a lot of labor costs while also meeting the individual needs of a client.

Risk control and audit: Artificial intelligence can also use network analysis to identify backtrack risk indicators ina proper time. Significantly, this is made possible through the use of anti-theft models to recognize hidden clues on data hence helps in the reduction of fraud in the bank and other financial industries

The Finance Future Market of AI

There are significant impacts of artificial intelligence in regard to the labor market. The main question is whether artificial intelligence will benefit the finance market in the coming days, or will it end up replacing human beings. AI technology will transform the business into various aspects of the financial sector. Arguably, it will make some jobs to be unwanted while at the same time it will improve efficiency and creation of new jobs. However, artificial intelligence will also pause some risks in the financial industry like micro-financial risk and macro-financial risks. Typically, the microfinance risks can end up causing instability in the market which can cause a lot of uncertainty.

From research, it has been estimated by the year 2027 at least 23% of the jobs in the financial sector of China will have been reduced by artificial intelligence or better still they will be transformed into new positions (David &Venessa, 2018). As for the other 77%, though they will not be replaced the efficiency of these positions will increase. Further analysis shows that the jobs which will be replaced by artificial intelligence are those jobs whose tasks are repetitive. Therefore, around 2 million people will be affected by this technology changes and specifically, 23% will be those from the financial sector.

Conclusion

In the final analysis, it is notable that this age of Artificial Intelligence causes a struggle between human beings and machines. However, it also creates more opportunities for various talents who can create and optimizes artificial intelligence technologies. AI in finance is generally about learning of patterns, data and many developments in the financial world. In conclusion, artificial intelligence significantly contributes to the finance industry, and it will continue to keep the financial services updated and ready to face the market.