Artificial intelligence in business and finance…

As global technology has evolved over the years, we have moved from television to the
internet, and today we are smoothly and gradually adapting Artificial Intelligence and it just
has evolved itself from thereon. The term AI was first coined by John McCarthy in 1956. It
involves a lot of the main things ranging from automation tasks to minute detail capturing in
facial recognition systems. It has become highly popular among large enterprises today
owing to the amount of data these companies are dealing in. So, 1st lets define ai in context of a
task….

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AI is a constellation of technologies that enable machines to act with higher levels of intelligence and
emulate the human capabilities of sense, comprehend and act. Thus, computer vision and audio
processing can actively perceive the world around them by acquiring and processing images, sound
and speech. The natural language processing and inference engines can enable AI systems to analyse
and understand the information collected. These human capabilities are augmented by the ability to
learn from experience and keep adapting over time. Irrespective of the type of AI being used,
however, every application begins with large amounts of training data. In the past, this kind of
performance was driven by rules-based data analytics programs & statistical regressions. But the
explosion of powerful deep neural networks now gives AI something a mere program doesn’t have:
the ability to do the unexpected.

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When AI takes over time-consuming, human-intensive "busywork" like data entry,

the team of finance experts can take on a more proactive, strategic role in business.
This means more time for financial modelling based on upcoming business
decisions, financial analysis to help understand different business trends and
financial reporting.
Perhaps the most profound effect of AI on business finance management is the
speed at which business leaders have access to important financial insights. just
imagine how things might look for your business if you had access to real-time
financial insights 24/7. This level of access would affect your sales negotiations,
hiring decisions, fundraising efforts, partnership decisions, etc. For every strategic
business decision, you would have access to accurate, up-to-date financial data and
insights at your fingertips. When AI unlocks access to real-time accounting data and
financial insights, business leaders can quickly identify important business
performance indicators and make necessary adjustments as they transpire.

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Artificial intelligence in finance is transforming the way we interact with money. AI is helping the
financial industry to streamline and optimize processes ranging from credit decisions to quantitative
trading and financial risk management. Ai for finance is broadly split into 4main categories that
dominate the sector. They are:

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Artificial intelligence in finance is transforming the way we interact with money. AI is helping the
financial industry to streamline and optimize processes ranging from credit decisions to quantitative
trading and financial risk management. And here are some of the services where ai has created
some ground-breaking impacts:

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• Quantitative trading is the process of using large data sets to identify

patterns that can be used to make strategic trades. Artificial intelligence is
especially useful in this type of trading. AI-powered computers can analyze
large, complex data sets faster and more efficiently than humans. The
resulting algorithmic trading processes automate trades and save valuable
time. AI can even put together recommendations for the strongest portfolios
depending on a specific investor’s short- and long-term goals; multiple
financial institutions also trust AI to manage their entire portfolios.

• Lets consider
ALPACA a USA firm using ai trading

How it's using AI in finance: Alpaca combines proprietary deep learning

technology and high-speed data storage to provide short and long-term forecasting
applications.
Alpaca’s technology identifies patterns in market price-changes and translates its
findings into multi-market dashboards. 

Industry impact: The company recently partnered with financial news giant

Bloomberg to provide users with its "AlpacaForecast AI Prediction Market." The
program predicts short-term forecasts in real-time for major markets. 

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Managing finances in this well-connected and the materialistic world can be a challenging
task for so many of us, as we look further into the future, we can see AI helping us to manage
our finances. Wallet started by a San Francisco based start-up, uses AI to builds algorithms to
help the consumers make smart decisions about their money when they are spending it. The
idea behind the wallet is very simple it just accumulates all the data from your web footprint
and creates your spending graph in order to save time from making lengthy spreadsheets or
writing on a piece of paper.

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Every day, huge quantities of digital transactions take place as users move money,
pay bills, deposit checks, trade stocks and more via online accounts and smart
phone applications. The need to ramp up cybersecurity and fraud detection efforts
is now a necessity for any bank or financial institution, and artificial intelligence is
playing a key role in improving the security of online finance. One another
application of ai is:

SHAPE SECURITY
How it's using AI in finance: Utilized by top banks in the U.S., Shape
Security curbs credit application fraud, credential stuffing, scraping and gift card
cracking by pinpointing fake users. The company's machine learning models are
trained on billions of requests, allowing the software to effectively distinguish
between real consumers and bots. Shape Security's Blackfish network also uses AI-
enabled bots to detect compromised login credentials, alerting both customers and
companies to security breaches instantly. 
Industry impact: Shape's solutions have helped one major bank protect customers
from account high jacking and detected one million credential stuffing attacks in
the first week of use, according to information provided on the company's website. 

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Time is money in the finance world, but risk can be deadly if not given the proper
attention. Accurate forecasts predictions are crucial to both the speed and
protection of many businesses. Often risk can be related to equity trading. And one
such industry to implement that is:

KENSHO
How it's using AI in finance: Kensho provides machine intelligence and data
analytics to leading financial institutions like J.P. Morgan, Bank of America,
Morgan Stanley and S&P Global. Kensho’s software offers analytical solutions
using a combination of cloud computing and natural language processing (NLP).
The company's systems can provide answers to complex financial questions in
plain English.
Industry impact: Traders with access to Kensho's AI-powered database in the
days following Brexit used the information to quickly predict an extended drop in
the British pound, according to a 2017 Forbes article.  In March 2018, S&P Global
announced a deal to acquire Kensho for roughly $550 million. 

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Having good credit aids in receiving favourable financing options, landing jobs

and renting an apartment, to name a few examples. With so many of life's
important necessities hinging on credit history, the approval process for loans and
cards is more important than ever. Artificial intelligence solutions are helping
banks and credit lenders make smarter underwriting decisions by utilizing a variety
of factors that more accurately assess traditionally underserved borrowers, like
millennials, in the credit decision making process. read it as it is

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Artificial Intelligence has already been implemented in the INDIAN banking sector
primarily to improve customer experience by adding chatbots as an additional
interface for customers like SIA by State Bank of India, Eva by HDFC and iPal by
ICICI.
AI has the potential to drive growth through enabling: (a) intelligent automation i.e. ability to
automate complex physical world tasks that require adaptability and agility across industries, (b)
labour and capital augmentation: enabling humans to focus on parts of their role that add the most
value, complementing human capabilities and improving capital efficiency. AI innovations in one
sector will have positive consequences in another, as industry sectors are interdependent based on
value chain. Economic value is expected to be created from the new goods, services and innovations
that AI will enable. Personally, where I think India can implement Ai is digitising the KYC
process to eliminate the need for physical document submission and verification is
something that traditional banks still do not offer. This can be simplified by utilising
AI-based computer vision technology to verify documents, Optical/Intelligent
Character Recognition (OCR/ICR) technologies to digitise scanned documents, and
Natural Language Processing (NLP) to make sense of them. read it as it is

17

Bad Calls
Though Artificial Intelligence can learn and improve, it still can’t make judgment calls.
Humans can take individual circumstances and judgment calls into account when
making decisions, something that AI might never be able to do. Replacing adaptive
human behavior with AI may cause irrational behavior within ecosystems of humans and
things.
Distribution of Power
There is a constant fear of AI superseding or taking over the humans. Artificial
intelligence can give a lot of power to the few individuals who are controlling it. Hence, AI
carries the risk and takes control away from humans while dehumanizing actions in
several ways.
Unemployment
Replacement of the workforce with machines can lead to wide-reaching unemployment.
Moreover, if the use of AI becomes rampant, people will be highly dependent on the
machines and lose their creative power. Unemployment is a socially undesirable issue.
Individuals with nothing to do can lead to the devastating use of their minds. Be it
banking or any other sector; Artificial intelligence can effectively increase the
unemployment rate.
Highly Expensive
Production and maintenance of artificial intelligence demand huge costs since they are
very complex machines. AI also consists of advanced software programs which require
regular updates to meet the needs of the changing environment. In the case of critical
failures, the procedure to reinstate the system and recover lost codes may require
enormous time and cost.
Artificial Intelligence delivered to wrong hands can turn out to be a serious threat to
humankind. If individuals start thinking destructively, they can generate havoc with these
advanced machines.

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The challenges introduced by the emergence of artificial intelligence revolve around

several things. However, AI is a right balance of skill and emotions which is continually
growing. Artificial intelligence provides banks, financial institutions, and tech companies
with significant competitive advantages. Nevertheless, it can completely transform the
financial sector and make it faster, but this will only be possible if the financial industry
can manage the security risk of systems based on AI.